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YouTube Transcript/The ONLY Trading Guide You’ll Ever Need (Full 10+ Hour Course)

Transcript of The ONLY Trading Guide You’ll Ever Need (Full 10+ Hour Course)

Emmanuel Malyarovich

0:00Welcome, ladies and gentlemen, to my 0:02free 10 plus hour trading course. And 0:04this is a special moment for me because 0:06what you're about to watch is something 0:09that I've spent hundreds of hours 0:11building [music]0:11over the past several years. This isn't 0:14a quick upload or a repackage tutorial.0:16This is the most complete beginner to 0:19advanced day trading education that 0:21[music] you will ever watch. And I am 0:23posting the entire thing on YouTube 0:25completely for free. And I say this with 0:28full confidence. My free course is 0:30genuinely better than most paid courses 0:32on the internet. And I'm not just saying 0:34that because it sounds good. I'm saying 0:36that because over 60,000 students have 0:39gone through my free course, applied it,0:41and they told me that it changed the way 0:43that they trade. Thousands of them 0:45became profitable traders for my free 0:47course alone, and many of them told me 0:49it was far more valuable than any $500,0:52$1,000, or even $5,000 program they 0:56bought from another guru. This video is 0:58special because it represents years of 1:00hard work, years of charting,1:02experimenting with trades, taking 1:04winning trades, taking losing trades,1:07losing money, making money, and reverse 1:09engineering everything that a beginner 1:11needs to know to finally become 1:13profitable. And for the first time ever,1:16I'm making it available for the entire 1:18world. And I want to tell you why. My 1:20name is Emanuel and 5 and a half years 1:22ago, my father taught me how to trade.1:24He was my trading mentor. And without 1:26him, I would not be a profitable trader 1:29today. And everything I teach in this 1:31course, every single concept came from 1:34the foundation he gave me. My goal is to 1:37now continue his legacy and lead the 1:39next generation of profitable traders 1:41the same way that my dad mentored me. My 1:44free course covers absolutely 1:46everything. It covers the basics. It 1:48covers the fundamentals of price action,1:50strategies, support and resistance, how 1:53to use indicators, how to scan, trade 1:56management, trade psychology, how to 1:58scalp. Literally everything that you can 2:00think of is included in this course.2:02This is truly the final blueprint that a 2:05beginner needs in order to finally 2:07become profitable and remove all of the 2:09guesswork from their trading. And I 2:11truly believe no other trader on YouTube 2:14has released something like this 2:16completely for free. Not at this depth,2:19not at this level, and not at this 2:21quality. And that's why I'm so excited 2:23that you're here today. So, if you're 2:25serious about becoming a profitable 2:27trader, and you're tired of being 2:28confused, you're tired of being 2:30inconsistent, and you're tired of 2:32piecing together concepts from random 2:34YouTube videos, I want you to lock in. I 2:37want you to be distraction-free. I want 2:39you to take notes and I want you to 2:41focus on everything that I'm going to 2:43teach you in this free 10 plus hour 2:45course. And if you do, you will be 2:47unrecognizable as a trader by the end of 2:50it. It's crazy because this free course 2:52genuinely means so much to me. It's a 2:55symbol of my hard work over the past few 2:58years and I am confident it'll be the 3:00most impactful trading video that you 3:02will ever watch. And before we get 3:04officially started with the course for a 3:07better viewing experience, my free 10 3:09plus hour course is also in my free 3:11private community where I'm going to be 3:13sending you way more other free 3:16resources such as frameworks to build a 3:18trading plan, PDF documents of the 3:20concepts that I talk about in the 3:22course. I even do free bi-weekly live 3:25training. So to get access to my private 3:28community, which like I said is 100%3:30free, you can go to the description of 3:32this video. you'll be able to click on 3:34the link and you'll also be able to 3:35watch the free course there and get 3:37access to all of those free materials.3:39By the way, my goal is to be as 3:41transparent and as real as possible 3:43because I think that is something that's 3:45severely lacking in the trading space.3:47And over the past 12 to 13 months, from 3:50November 1st of 2024 to November 29th of 3:532025, which is today, I've made over 3:55$559,000 3:57in day trading profits, which is a 4:00cumulative rate of return of over $372%4:03on my entire trading account. This is my 4:06Charles Schwab brokerage login. I use 4:08Think or Swim platform. And if you're 4:10thinking this is a screenshot that I 4:12edited or if this is Photoshop, I will 4:14go ahead and refresh the page. And if I 4:16do that over the past one year exactly,4:19actually, I've made over $481,000.4:22And if we go back to the same dates that 4:25I showed you before of November 1st of 4:282024, there's the $559,000.4:31I actually had a really good November in 4:342024. And I'm also happy to show you my 4:38personal brokerage statements as well.4:40This is from 2025. And I started the 4:43year off in January with a really good 4:45month. I cleared over $53,000.4:48And then we had the whole tariff 4:51situation where the market dropped over 4:5320% and I actually had my best month of 4:56the year where I made just about $69,000 4:59in February. And March was also a nice 5:02month. It's going to show that I lost 5:04money in March. My change in period 5:06balance is negative3,000. However, I 5:09withdrew $47,000 from my account that 5:12month. So, I actually made $44,000 5:16in March, which was also a nice nice 5:18month. And my slowest month of the year 5:21was actually in June where I only made 5:23$10,850.5:25And that is because I was in Europe and 5:27I only traded about 20 to 30% of the 5:30time. You know, everyone has to take a 5:32vacation. So, I was mostly in Europe. I 5:34went to Barcelona, Portugal, Amsterdam,5:36and London. I did some trading on the 5:38side and ended up making a little bit 5:40more than $10,000. And I'm also happy to 5:43show you the other months as well. It 5:46was overall a super green year. Every 5:48single month was green for me. I did not 5:51have a single negative month this year.5:52And I'm really looking forward to 5:54continuing that trend into 2026. And 5:57yeah, the reason I'm showing you this is 5:59to be transparent and to show you that I 6:01actually make money with trading. I do 6:04this for a living. This is my passion.6:06This has been my career for over 5 years 6:08and everything that I'm going to teach 6:10you in this free course I personally use 6:12on a daily basis to make money. Let us 6:15begin this free course by talking about 6:18the fundamentals of trading. Let's talk 6:20about the basics. And let us first 6:22define what trading actually is. And 6:26trading is when you're buying and 6:28selling a financial asset. Whether it's 6:31a stock or a crypto or it's gold or 6:33silver or oil or wheat or it's an 6:36options contract. You're buying and 6:38selling a financial asset based on 6:41technical analysis and price action.6:44This should not be confused with 6:46investing. I see a lot of people confuse 6:49the two. A lot of people think that 6:51trading is investing. It is not. As 6:53investors, we try to determine the 6:56intrinsic value of the asset that we're 6:59looking at. And based off that intrinsic 7:01value, we can determine whether the 7:03asset is overvalued or undervalued,7:07right? And in order to figure out the 7:09intrinsic value, most of us look at the 7:12financial documents of a company. We 7:14look at balance sheets, income 7:15statements, we're looking at industry 7:18trends. We're looking at the news. We're 7:20reading analyst reports. We're 7:21understanding the cash flow the company 7:23has. We're understanding the assets 7:25that's on the balance sheet. We're 7:27looking at the fundamentals of the 7:29company and or of the asset that we're 7:31analyzing. And based off those 7:33fundamentals, we determine is it 7:35overvalued or undervalued. Right? When 7:38you think of investing, you should think 7:39of Warren Buffett. What he does is 7:42invest in companies long-term and that's 7:44how he makes his money. He is not 7:47trading. When you are trading, you are 7:50solely looking at price action. You're 7:52not looking at any financial documents 7:54or news or fundamentals or anything. We 7:57solely look at the price action. And in 8:00this course, I'm going to dive really 8:03deep into what price action is. And 8:05there's going to be other videos that go 8:07over company fundamentals and investing 8:10and the real differences between 8:12technical analysis and fundamental 8:13analysis. But a short little summary,8:17price action is the study of how prices 8:19move. And what we do as traders is we 8:22analyze how prices have moved in the 8:24past. We analyze what prices are doing 8:27right now, how they're moving currently 8:29to analyze, to speculate, and to 8:32ultimately make money on what prices are 8:34going to do in the future. That's what 8:36we focus on as traders. We focus on 8:38technical analysis and price action.8:41That is it. A question that I get asked 8:43all the time is, is trading gambling?8:46And in order to answer this question, we 8:48need to define what gambling is? And by 8:51definition, gambling is betting on the 8:54uncertain outcome of a future event.8:57Meaning, you don't know what's going to 8:59happen in the future, and you're betting 9:01that prices are either going to go up or 9:04prices are going to go down. By 9:06definition, trading is gambling.9:09However, the connotation around gambling 9:12is that it's impossible to become 9:15successful as a gambler, I guess. And I 9:18don't really like to call trading 9:20gambling. I think trading is really 9:21similar to poker or blackjack in 9:24casinos, where if you're a really good 9:26poker and blackjack player, if you 9:29understand what you're looking for, if 9:30you have an actual edge, you're going to 9:33make money. And the same thing applies 9:35for trading. And in trading, just like 9:37in blackjack, we shift the probabilities 9:41of the trade in our favor by developing 9:45what is called an edge. And you've 9:47probably heard that before. Every trader 9:50has his or her edge. And more likely 9:53than not, you have multiple edges that 9:56make you a profitable trader. So, let's 9:58define what an edge is. That is a 10:00statistical or behavioral advantage in 10:03the market. An edge is an advantage.10:05It's something that makes you better 10:08than other traders who are unprofitable.10:11It's the reason why over hundreds of 10:13trades, you're going to make more money 10:15than you lose. You have to understand 10:17that an edge, a statistical advantage is 10:20played out not over five or 10 trades.10:23It's played out over thousands of 10:25trades. And that's why it's so important 10:27to develop a sample size for your 10:30trading so you can actually extract data 10:32and then use that data to refine and 10:36build your trading plan which by the way 10:38I'm going to cover all of this later on 10:40in the course. Okay. So you need to 10:43focus on building an edge and that edge 10:46is going to make you money longterm 10:49after you take hundreds and hundreds of 10:51trades. So very good. So, is trading 10:54gambling? You could call it gambling 10:56because you're betting on an uncertain 10:58outcome of a future event. You don't 11:00know if prices are going to go up or 11:01down and you're betting on that price 11:04are going to go up by going long or that 11:06prices are going to go down by going 11:08short. And the way you shift the 11:10probabilities in your favor is by 11:12developing an edge. So, that begs the 11:14question, what types of edges even 11:17exist? And there's a bunch of different 11:19edges. Number one, technical edge.11:22Technical edge is an edge when it comes 11:24to reading the price action, mastering 11:27the chart setups, understanding the 11:29relationship between the buyers and the 11:31sellers, understanding volume,11:32understanding support and resistance,11:34understanding what separates a 11:37highquality setup from a lowquality 11:39setup, understanding how to calculate 11:41reward to risk. So, you're only picking 11:43the setups that have a high likelihood 11:46of making you money. There's also a 11:48psychological edge. This is a trader 11:51that's able to control his or her 11:52emotions. They're able to stay 11:54disciplined and they're able to execute 11:57on their plan when even when it feels 12:00uncomfortable. And this is when you're 12:02able to control yourself. You're able to 12:04also control your impulses and you're 12:06able to consistently follow your plan 12:09without having your emotions impact you.12:11Next, we have a riskmanagement edge. And 12:14there is a really kind of funny 12:16expression that I've heard in trading,12:18and you'll have to excuse my French, but 12:21most traders eat like birds and 12:24like elephants. And essentially what 12:27that means is a majority of traders 12:29don't make much money on their winning 12:31trades when they're right, but they lose 12:34a lot on their losing trades when 12:36they're wrong. And as a trader, you want 12:39to reverse that outcome. You want to be 12:42capitalizing heavily on the trades where 12:45you are right. On the winning trades,12:47you want to be making a disproportionate 12:49amount of money. And then on your losing 12:51trades, you want to focus on limiting 12:54your losses. And that's the 12:56riskmanagement edge. And I'll tell you 12:58straight up for me, the reason I am such 13:00a good trader today, I am really good at 13:03risk management. I rarely have losing 13:06weeks. I've never had a losing month in 13:09my entire career. Of course, I have 13:11losing days, but I'm really good at 13:13limiting my losses on my losing trades.13:16And I'm very good on capitalizing on my 13:18winners, but specifically I'm really,13:20really good at managing my losses. I'm a 13:23really good loser, and that's what makes 13:25me a really good trader. Now, of course,13:26I do have the other edges as well, but I 13:29would say my riskmanagement edge is 13:31probably the most important edge in my 13:33own trading. And a lot of the times you 13:36could have an excellent strategy, you 13:38could be an excellent trader, but if 13:39your risk management sucks, you're never 13:41going to become profitable, right? Your 13:43first priority as a trader is to 13:45actually preserve the capital in your 13:47account. You'll learn about that later 13:48in the course. Number four, execution 13:51edge. This is the edge where you have a 13:54really good trading plan. You are very 13:57good at reading price action. You're 13:59good at identifying high quality setups.14:01You're good with the risk management,14:02but you're also excellent at executing 14:05it and being able to actually make money 14:08off of your trading plan in real time.14:10You know how to quickly execute on your 14:12platform and get out of trades really 14:15quickly, enter into trades really 14:16quickly. You're able to manage trades in 14:19real time without making emotional 14:21decisions. And it's your ability to act 14:24on your plan without hesitation. And in 14:27this course, by the time this video 14:29ends, you will know exactly how to turn 14:32every single one of these edges that I 14:34just talked about into a system. You're 14:37going to learn the specific details that 14:40you need to know to master every single 14:42one of these edges. So hopefully it can 14:44transform the way that you trade 14:46forever. And that's exactly why I 14:47created this free course, to give you an 14:49edge in your technicals, with your 14:52psychology, with your risk management,14:54and with your execution. Let's go over 14:56the different types of markets that you 14:58could trade in in 2026. And for me 15:00personally, I day trade stocks. I don't 15:02trade crypto. I don't trade forex. I 15:04don't trade futures or options. I am day 15:07trading stocks only. And I trade small 15:10caps, midcaps, large caps. I even trade 15:12penny stocks. And I personally trade on 15:15a margin account. Now, the one thing 15:17about trading on a margin account is 15:19that the PDT rule is going to apply. In 15:23the PDT rule, the pattern day trader 15:25rule, it requires you to have at least 15:27$25,000 in your margin account if you 15:31want to take more than three trades per 15:33week. If you have less than $25,000 in 15:36your margin account, then you're limited 15:38to only three trades per week. Now, the 15:41reason why a margin account is so useful 15:43is number one, on a margin account, I 15:45can go long and I can go short. on a 15:49cash account, which is a very common 15:50alternative. You cannot go short on a 15:53cash account. And there are also other 15:55limitations that I'm going to talk about 15:57later in this free course. And with a 16:00margin account, you also have access to 16:034x additional um intraday buying power.16:07What that means is if I have $25,000 in 16:10my margin account, I could day trade 16:12with $100,000 worth of capital. If I 16:15have 30K in my account, I could trade 16:17with $120,000 16:19worth of capital. And you might think 16:22that's really risky. Or maybe you're 16:24associating the word margin with someone 16:26that you know who lost a lot of money.16:29But margin is only risky if you don't 16:31know how to control your risk. If you 16:33just yolo every play, you have no idea 16:35what margin is. You don't know how to 16:36size your positions. Of course, it's 16:38risky. If you don't know what you're 16:40doing, yeah, trading is going to be 16:41risky. Anything is going to be risky if 16:43you don't know what you're doing. You 16:45can't imagine driving a car without 16:48knowing how to drive, right? Obviously,16:50that's going to be risky, but that's why 16:52you learn the proper precautions. You 16:54learn how to drive a car effectively and 16:56that's when you go out on the highway,16:57right? So, same thing with trading.16:59There are ways to minimize your risk and 17:02for you to control your risk, which is,17:04you know, that's exactly why you're 17:05watching free course. I'm going to teach 17:07you how to do that. Now, I personally 17:09trade on a margin account because I'm 17:12able to take more than three trades per 17:14week. And of course, I have way more 17:15than $25,000 in my account. How However,17:18when it comes to how much money you need 17:20to start day trading, you only need 17:22about 25,000. In fact, I would probably 17:25add a little bit just to have a buffer 17:27because if you go below 25,000, even if 17:30it's 24,999,17:33you'll be below the 25K and you'll be 17:35limited to three trades per week. So,17:37I'd recommend having maybe 25,500 in 17:40your account or 26,000 or 27,000 just so 17:43you have a small little buffer so you're 17:45not constantly worried that your account 17:47balance is going to fall below $25,000.17:50I also think that day trading stocks,17:52what I do, it's a lot easier and more 17:55straightforward to manage your risk. In 17:57fact, I think it's overall way more 18:00beginner friendly than trading options 18:02or futures or even crypto. I really 18:04think day trading stocks is the most 18:07beginner friendly and it's the easiest 18:09to actually control your risk as long as 18:11you know what you're doing. Okay, number 18:14two, crypto. This is when you're trading 18:16Bitcoin or altcoins such as Ethereum,18:19Salana, or other coins. With crypto, you 18:22could use actually an insane amount of 18:24leverage. There are some platforms that 18:26allow you to trade with up to 200x 18:29leverage, which is just insane. Um, I 18:32don't really recommend day trading 18:34crypto. I think it's way better for 18:37swing trading. Now, the thing is with 18:39crypto, it's a 24hour market. And what I 18:42don't like about trading in a 24-hour 18:44market is that I really like that as a 18:46day trader, the stock market closes at 18:49400 p.m. Eastern. Meaning once 4 p.m.18:52hits, the market's closed. I can't trade 18:53anymore. And I like that. I like, you 18:57know, once 4 p.m. hits, I'm out of all 18:59my positions as a day trader. I don't 19:01have to worry about overnight risk. I 19:03don't have to worry about, oh, well, you 19:05know, where's my stock opening at the 19:06next morning, am I up or am I down? I 19:08don't worry about that. 4 p.m. hits, I'm 19:10done with the day, and I don't think 19:12about trading unless I'm journaling or 19:14reviewing my trades until the next 19:15morning, which I like that. With crypto,19:18it's a 24/7 market. So, you might be 19:21waking up in the middle of the night and 19:22checking on your positions and just 19:24constantly being stressed because 19:25there's crazy fluctuations in the crypto 19:28markets. I don't like that. Okay? I like 19:30trading in a market that closes at 4 pm 19:32Eastern. Okay. However, you know,19:35there's a lot of volatility in crypto. A 19:36lot of traders do like that. What I 19:38don't like about crypto as well is that 19:40during slower times like during bare 19:42markets or where or when the market's 19:43not doing anything or when Bitcoin is 19:45just chopping around, right, volume can 19:47kind of dry up and it can be pretty 19:49slow. So, yeah, crypto is a whole 19:52another animal. I personally like day 19:54trading stocks, but I do invest in 19:56crypto. I'm a big big believer in 19:58Bitcoin and Ethereum long-term. Next,20:00futures. I'll be honest with you guys, I 20:02don't have a lot of futures experience,20:04but that's like trading NQ, ES, oil,20:06gold, and other leveraged instrument 20:08instruments. Um, it's very prop firm 20:10heavy. A lot of people who trade futures 20:13use prop firms, which I'm also going to 20:15cover in this course. And I think 20:17trading futures, it's easier to scale 20:21your profits once you're really good at 20:24trading futures. However, it's there's a 20:28lot more of a learning curve to get 20:30started because I think it's a lot 20:31harder to manage your risk with futures 20:33compared to day trading stocks. And 20:35that's why I recommend for most 20:37beginners to just, you know, start with 20:39stocks and later on you can move on to 20:41futures. And yeah, I mean, I think I 20:45don't have much experience with it. So,20:48you could still apply a lot of my 20:49education that I teach in this course 20:51towards futures. I just don't personally 20:52trade it. Uh, forex, never trade forex.20:56Never will. I think it's a really 20:58heavily manipulated market. I just don't 21:00recommend trading forex. Why would you 21:01trade forex when you could trade, you 21:04know, stocks or futures or crypto? Just 21:06stick to those. Personally, I day trade 21:08stocks. But it doesn't matter. You could 21:10apply everything that I teach in this 21:12video towards all markets. So, if you 21:14want to use my education for futures,21:17great. You can do that. You want to use 21:18it for crypto, great. You could do that.21:20For stocks, fantastic. That's exactly 21:22what I trade. Even if you want to trade 21:24forex, no problem. You can still use all 21:27of these principles and fundamentals and 21:29price action concepts that I'm going to 21:31teach for your trading. Let's go over 21:33the tools, software, platforms that you 21:36need in order to trade. And I actually 21:38have personal experience with a lot of 21:40the platforms I'm going to talk about.21:42So, I'm going to give you my honest 21:43opinion. Number one on my ranking is 21:45Think or Swim by Charles Schwab. This is 21:48actually the platform that I personally 21:50use for my own day trading. And whenever 21:53you're creating a Schwab account, make 21:55sure you enable margin and you enable 21:57think or swim access when you are 22:00applying. And let's go over the pros 22:03first. Number one, the execution is 22:05overall really good. It's a great 22:07platform to scalp stocks on. You know,22:10of course, every platform is going to 22:12have delays and it's going to be slow 22:13from time to time, but overall, Think or 22:15Swim is consistently fast with the 22:18execution, and I think the platform 22:20overall is actually pretty intuitive. At 22:22first, it's going to seem really strange 22:25because it looks a lot different than 22:26other trading platforms. However, once 22:28you get the hang of it, it's super 22:30intuitive. I really like the charting.22:32It's great for shorting, has a really 22:34good hard to borrow list, and the hard 22:36to borrow fees aren't too expensive. So,22:39you have a lot of different options when 22:41it comes to shorting stocks. Um, and 22:43it's available internationally, right?22:45It's available almost everywhere around 22:47the world. In Europe, it's available in 22:49South America. It's available in certain 22:51parts of Asia. It's available in certain 22:53parts of the Middle East. So, if you're 22:55watching this and you're not from the 22:56United States, I would just do a simple 22:58Google search, look up, is Schwab 23:01available in my country and if it is, go 23:04to the Schwab international site and you 23:06should be able to find your country and 23:08you'll be able to apply for an account.23:11And overall, I love using Thinkorswim.23:14Another huge pro is they have excellent 23:16price improvement and that's when they 23:18give you a better fill than you were 23:21supposed to get on your trades, which 23:23could be a massive edge on some of your 23:25trades. So, the price improvement is 23:27excellent as well. I would say the 23:30biggest con is the fact that the paper 23:33trading platform has limitations. So, if 23:36you're a beginner and you don't want to 23:37jump into real money right away, you 23:39want to paper trade first, the paper 23:41trading platform honestly kind of sucks.23:43there's huge delays. The execution isn't 23:46good. The fills aren't good. So, that's 23:49the one con I would say. Funny enough,23:51all those delays that exist with paper 23:53trading, they don't exist with real 23:55money. And in fact, it could even be 23:57looked at as a pro because I've actually 24:00had students that paper traded on Think 24:02or Swim for a few months. They became 24:04profitable paper trading. And once they 24:08transitioned into real money, they 24:09actually performed even better with real 24:12money because paper trading on Thinker 24:14Swim is almost like trading on hard 24:16mode. It's like playing Mario Kart on 24:19max difficulty where it's super super 24:21hard, right? Um but then once you go to 24:23real trading and you don't have those 24:25same delays and you actually have really 24:27good execution and good fills, trading 24:29feels a lot easier. So, it's kind of 24:31actually a good thing where you can kind 24:32of trade on hard mode as a beginner and 24:34then when you go to trading with real 24:35money, it feels a lot easier 24:37execution-wise. So, I highly recommend 24:40Think or Swim. I don't even have an 24:42affiliate link. I'm just recommending 24:44what I personally use. Next is Trade 24:47Station. I used to use Trade Station 24:49back in the day. Trad Station is solid.24:52I would say it's just a worse version of 24:55Think or Swim. The execution is actually 24:57great. The platform can be a little bit 25:00glitchy when it comes to charting, but 25:02overall it's actually really similar to 25:04Think or Swim. It's a great platform.25:06The biggest con for me personally is the 25:08fact that the short list is limited. You 25:10can't short as many stocks on Trade 25:12Station as you can on Think or Swim. And 25:15locating shares can be super annoying.25:19So, if you're choosing between Trade 25:21Station or Think or Swim, I would just 25:22use Think or Swim personally. Now, let's 25:25go over Weeble. I've never used Weeble 25:28actually. However, I've had students 25:30that have used Weeble. It's a pretty 25:32good platform execution-wise, but 25:34similar to Trade Station, the short list 25:36is limited. I don't think they really 25:38have that good of price improvement. And 25:41the customer service is non-existent.25:43Okay? So, if you're stuck in a trade and 25:45you want to call their front desk, no 25:46one's going to pick up. Yeah. This the 25:48customer service just isn't good. So 25:50between Weeble Trade Station and Thinker 25:54Swim, I would obviously use Think or 25:56Swim, but Weeble is still a solid 25:58option. Interactive Brokers, it has 26:00commissions. So if you're in a country 26:03where no other, you know, you don't have 26:06access to any of these other platforms 26:07and Interactive Brokers is fine.26:09However, it has commissions and I know 26:11the platform isn't very intuitive. Uh,26:14next we have Lightseed and there's a 26:15bunch of platforms similar to Lightseed 26:18also like Cobra Trading and the only 26:21issue with Lightseed is that they have 26:23big commissions but you know the 26:26execution on Lightseed is amazing. So 26:29the execution is amazing and I think 26:31it's actually pretty complicated for a 26:32new trader. That's another con. And you 26:34could also customize your routing on 26:36Lightseed. So, I would say if you're a 26:37trader who's trading massive size, where 26:41you don't really care about paying 500 26:43to 2,000 a day in commissions, you're 26:45trading massive size, you're going for 26:4720, 30, 40, 50k days, light speeded is 26:50probably your best option. However, the 26:52commissions are super rough, but the 26:54execution is excellent. So, that's what 26:57I would recommend. Personally, I would 26:58just go with Think or Swim Platform out 27:01of all of these. And if you if you're 27:04international, I think you could 27:06actually pair interactive brokers with 27:08tradation if you don't have Thinkorswim 27:10available in your country. And if you're 27:12a beginner or unless you're trading 27:15massive size, I just wouldn't use 27:16Lightseed, right? Because the 27:18commissions are just overwhelming. Other 27:21tools, you could use tradingview.com.27:24You don't need to purchase a paid 27:26account. I use the free account. I don't 27:28use this for my personal day trading. I 27:30use this after trading hours if I want 27:32to review charts. I use this to look at 27:34crypto. I use this on my phone whenever 27:36I want to check out a chart. Um, it's a 27:38really easy charting software. I don't 27:40think there's a need to pay for premium 27:42though. You could also use a trading 27:44journaling software where you could 27:45actually link the platform where you 27:47execute your trades to this software and 27:50your trades would actually carry over 27:53and the software would give you feedback 27:55based off your win rate or your reward 27:57to risk and it can give you very 27:59valuable information about your trading.28:02So, it could be super useful. The most 28:04popular one is Tradezella. Now, I don't 28:06personally use one right now. However,28:09I've had a lot of students that have 28:10used Tradezella and other ones and they 28:12found it really beneficial for their 28:14trading. I would just do a Google search 28:16and look up best trading journaling 28:19softwares and from there just pick the 28:21one that makes the most amount of sense 28:22for you. And when it comes to actual 28:24trading setup, my biggest recommendation 28:27is to just keep it simple. Now, you can 28:31trade on a laptop. That's fine. When I 28:33started, I actually traded on a small 28:35little Dell laptop. However, I do 28:37recommend a 25 in plus monitor just so 28:41you do have the screen space and I'd 28:44recommend either a desktop computer or 28:46you could actually link your laptop to 28:48the monitor. You need a mouse and a 28:50keyboard and of course you need a great 28:52Wi-Fi con uh connection. That's all you 28:55really need. Okay, there are a lot of 28:56traders that have like crazy curved 28:58screens. They have five different 29:00monitors and it looks like a really 29:02complicated and professional and fancy 29:04setup. You don't need that. Okay,29:06especially as a beginner, if you have a 29:0825-in monitor, a normal computer, and a 29:11good Wi-Fi connection, and a mouse and a 29:12keyboard, that is all you need. Start 29:15small, and then you could upgrade your 29:17setup as you become more profitable.29:19Let's talk about order types and order 29:21execution. Whenever you are placing a 29:23trade, you need to submit an order. And 29:27the best way to think about this is the 29:29orders that you place is kind of like 29:31the language between you and your 29:33trading platform. And you're going to be 29:36placing different types of orders 29:38depending on the trade and depending on 29:40what you want to accomplish. So you're 29:42going to be placing different orders if 29:44you're going long or short or whether 29:46you want to buy at a certain price or 29:48exit at a certain price. And it's really 29:50important to master the language between 29:53you and your trading platform so you 29:56could trade quickly and you could trade 29:58efficiently. So, let's go ahead and talk 30:00about all of these types of orders so 30:02you can become a master and you could 30:04really understand the types of orders 30:06that you want to execute. So, let's go 30:09and start with a market order. And this 30:11is probably the most basic type of 30:14order. And by definition, a market order 30:17buys or sells a stock immediately at the 30:21best available price. So, if you're 30:23trading on your platform and you press 30:26market buy, you are going to get filled 30:28right away at the best available price.30:31If you're in it long, let's say you're 30:33in a position, it's long, it's moving 30:35up, and you want to sell that position 30:37as quickly as possible, you would place 30:39a sell market order and it would fill 30:42your position at the best price 30:44available, the current price. So, this 30:46is an order that you would use if you 30:49want to get out as quick as possible.30:51you want to exit right now, you would 30:53place a market order to sell if you're 30:55long, or you would place a market order 30:57to cover your shares if you're in it 31:00short. So, let's say, for example, Apple 31:03is trading at $180, and you place a 31:06market buy order. That order is going to 31:09fill you right away. However, it's not 31:12going to fill you at your desired price.31:15It's not going to fill you or it's not 31:16guaranteed to fill you at your desired 31:19price. Meaning, let's say the price is 31:21at 180. You press a market order to buy.31:24Maybe by the time your order executes,31:27the price moves and it'll fill you 31:29either at 180.02 or maybe if it's really 31:34moving fast, it's going to fill you way 31:36late and it's going to fill you at 18020 31:39or maybe it'll fill you, you know, fill 31:41you below that price where it fills you 31:43at $1 179.98 or $179.90.31:47And that is really going to depend on 31:49how quickly the stock is moving. It's 31:51going to depend on the spread which 31:53you're going going to learn about later.31:56It's also going to depend on the 31:57liquidity. So this is like saying I'll 32:00pay whatever the current price is. Just 32:02get me in right now or get me out right 32:05now. Okay. So what does a market order 32:08really mean? So you're going to get 32:10really fast execution because it's going 32:11to fill you immediately whether you're 32:14getting in or whether you're getting 32:15out. However, it's not guaranteed to 32:18give you the best price. For example,32:20let's say Apple is moving up and it's 32:24starting to consolidate. And let's say I 32:26want to buy it when it hits 180, like 32:30this example, right? And let's say as 32:32soon as it hits 180, that's your trigger 32:34to buy it. And you place a market order 32:37to go long, right? By the time your 32:40order executes, maybe the stock has 32:42already moved really quickly and it's 32:44here by this point where where it really 32:46moved up and you place an order at 180 32:48market order to buy, but it ends up 32:51filling you at let's say 18030,32:54right? That could happen where you get 32:56filled 30 cents late than when you 32:59actually placed the order. And of 33:01course, that's going to depend on 33:02liquidity. It's going to depend on the 33:04spread and it's going to depend on how 33:05quickly the stock is moving. So that's 33:07the downside. you're not always going to 33:09get the best price. You can't control 33:11the price that you get filled at because 33:13it's just going to fill you at the best 33:14available price, right? So, for me 33:16personally, I rarely use market orders 33:20to enter into trades. Pretty rare. I 33:22would say maybe 5% of the time, I'm 33:24going to enter into a trade using a 33:27market order. However, I always use 33:30market orders to exit my trades, right?33:33Um, even if it's a stop-loss, right? A 33:36stop-loss order actually triggers and 33:38executes like a market order. And I'm 33:40going to explain that in a second. But 33:42whenever whenever I'm exiting, I'm 33:44always using a market order to exit. I 33:47rarely use market orders to get in 33:49because whenever I'm entering into a 33:51trade, I want to make sure I get my 33:54desired price. I don't want to get in 33:56late. Okay? Because if I get in late,33:58let's say I want to get in at 180. I 34:00place a market order right here and it 34:02fills me a 18030. Well, I'm 30 cents 34:05late. That's going to impact the size of 34:07my stop-loss, which you will learn about 34:09later in this free course. And it's also 34:12going to impact my reward to risk, which 34:14you will also learn later. So, yeah,34:16when it comes to market orders, I don't 34:18like to use them to get into trades.34:20However, I always use them to exit out 34:22of trades, and it's going to fill you at 34:24the best available price. However,34:26you're not guaranteed to get the exact 34:29price that you want. So, this is more 34:31for instant execution. Let's go over 34:33what a limit order is. A limit order 34:36lets you set the maximum price you're 34:39willing to pay when it comes to going 34:41long or the minimum price you're willing 34:43to sell when you're going short or when 34:45you are selling. So the best way to 34:48explain this is to go over an example.34:50So let's say you want to buy Tesla at 34:53$240. However, the current price is 34:57$245. So, let's say Tesla is basing and 35:01right here it's $245.35:05Okay, great. However, you think that's a 35:07little bit too expensive. You don't want 35:09to pay $245 35:11for your shares of Tesla. You want to 35:15pay $240 or less, right? You don't want 35:19to pay anything more than $240. So,35:21you're okay with paying 240. You're okay 35:23with paying $235 for Tesla. You're okay 35:26with paying $200 for Tesla. You just 35:28don't want it to be more than $240.35:32Great. In this example, you would set a 35:35limit order at $240. So, you'd place a 35:39limit order right here. Let's say at 35:43$240. So, $240,35:46you place a limit buy. Okay, I'll just 35:49write limit 35:51buy. Fantastic. So now the only way that 35:55you would get filled on your limit buy 35:58order is if the prices went down to 36:01either 240 or below 240 where maybe 36:05let's say Tesla reported earnings and 36:09the earnings weren't very good at all 36:11and the stock gapped down overnight had 36:14an overnight change in price to the 36:15downside and opened lower the next day.36:18Let's say it opened lower at 230, right?36:21Would it fill your order? Well, is 230 36:25less than 240? Is it a better price than 36:28240? Yes, it is. 230 is less than 240.36:31It's a better price. So, therefore, you 36:33would get filled, right? If it gapped to 36:36220,36:37would you get filled? Well, 220 is less 36:39than 240. You placed a limit by 240. So,36:42you want to pay 240 or better. 220 is 36:45better than 240. Yes, you'd get filled.36:48Let's say it opened instead at 242.36:51Would you get filled?36:55Would you? And the answer is no, you 36:58wouldn't because you only want to buy 37:00this at 240 or lower. 240 or better. So,37:03you will not get filled. So, you would 37:04get filled at 240s, 230S, 220s, right?37:08And you know the downside is, right, you 37:11control the price. You control exactly 37:15where you want to get in. However, you 37:17might not get filled, right? Maybe the 37:18prices don't go down to 240 and instead 37:22the prices just continue going higher.37:24In that case, you're not in the trade,37:26right? So, this is like telling your 37:29broker, I want you to buy these shares.37:31I want you to buy this stock, but only 37:33if it gets cheap enough. Okay? And the 37:35same thing applies if it's the opposite 37:37way and you're going short. It's the 37:39same exact thing. Okay? So, when it 37:41comes to limit orders, I actually use 37:44limit orders 95% of the time when I'm 37:48entering my trades. And I place limit 37:50orders on the current ask price when 37:52going long. And I place sell limit 37:54orders on the current bid price when 37:56going short. So, there's probably going 37:58to be a video later on in this free 38:00course that really explains the bid and 38:02the ask. But basically, you know, when 38:05it comes to trading, it's basically kind 38:07of like an auction. You have a bid and 38:09you have the ask, right? The ask is the 38:13best price the sellers are willing to 38:16sell at and the bid is the best price 38:19[clears throat] the buyers are willing 38:20to buy at, right? So, for example, let's 38:22say the bid is at $7 and the ask is at 38:26$701. So, right off the bat, the 38:29difference between the bid and the ask 38:31is called the spread. So, $701 minus $7 38:35is 1 cent. That means there's one cent 38:37spread here. That still sounds 38:39confusing. Don't worry. I'm going to 38:40cover it later in this free course.38:41Okay. So, if I want to buy a stock, I'm 38:46going to get failed where where well,38:48who am I buying from? I'm buying from 38:50the sellers. And the sellers, well,38:52their price is at 701. The sellers are 38:55willing to sell this stock at 701. So,38:58when I'm buying, I'm going to get filled 39:01on the ask. I'm going to get filled on 39:02the ask price. Whenever I'm selling,39:05well, who am I selling to? I'm selling 39:07to the buyers on the bid. So if I sell 39:09something, I'm going to get filled on 39:12the bid at $7. So for example, let's say 39:15I buy a,000 a,000 shares of stock,39:19right, at this current price. Well, I'm 39:21going to get filled for where I'm going 39:23to get filled on the ask. So I buy a,000 39:26shares. I'm going to get filled at 701 39:29when I'm going long. Okay. Now, if I was 39:32to sell immediately, let's say the price 39:35doesn't move and I just sell this 39:37immediately. Well, if I sell, I'm going 39:39to get filled on the bid, right? So, now 39:41I'm selling a,000 and I'm going to get 39:44filled at $701. Oh, I'm sorry. I'm going 39:47to get filled at $7. $7, not 701. I got 39:51filled at 701 when I bought it. And then 39:53when I'm selling it, I get filled on the 39:55bid. So, I get filled at $7. So, how 39:58much am I losing here? Well, right off 39:59the bat, I'm losing 1 cent, right?40:02Because $71 40:04when I got in long, I got filled on the 40:06ask. When I sold it, I got filled on the 40:08bid. So, I lost one cent in this trade,40:10right? 1 cent on a,000 shares is $10.40:15So, that means by just me getting into 40:19this stock and without it moving, I'm 40:21automatically down $10. I'm 40:24automatically down one cent on every 40:26single share that I bought.40:28Coincidentally, one cent is also the 40:31spread. And that's exactly why spread is 40:33significant. That's why we want to trade 40:35stocks that have tight spread, right?40:37Because if [snorts] I'm buying, let's 40:39say, something that's super spready.40:41Let's say instead this is at 707. This 40:46is at $7, right? So the the bid is at 40:48$7. It's the best price the buyers are 40:51willing to buy at, but the ask is at 40:53707. This is the best price the sellers 40:55are willing to sell at. That means 40:58what's the spread? Well, $707 minus $7 41:01is 7 spread because that's the 41:03difference between the bid and the 41:04offer. That means if I was to buy this 41:06stock, where would I get filled? 1,000 41:08shares. I want to buy it. I would get 41:10filled on the offer. So, I'd get filled 41:12at 707.41:14And then let's say the price doesn't 41:16move and I want to sell it. Okay, I sell 41:18a,000. Where would I get filled? At $7.41:23So, how much did I lose here? I lost 7 41:26cents per share. How many shares did I 41:28buy? A,000. So I would lose $70.41:32So basically the spread is significant 41:35because that's the exact amount that 41:36you're down whenever you enter into a 41:39trade without it moving, right? Like if 41:41you enter into a trade right away,41:43you're down whatever the spread is.41:45You're down 1 cent times how many shares 41:48you have or in this case down 7 cents 41:50because the spread is 7 cents. Does that 41:52make sense? So that's actually a little 41:54bit of a crash course when it comes to 41:56spread. It's not really important yet.41:57You don't need to know that yet, but 41:58just so you have some background. Let me 42:00go ahead and erase this. So let me 42:03explain how I place my limit orders.42:05Okay, let me just erase all this. Okay,42:08so when it comes to placing my limit 42:10orders,42:12and I'm looking and by the way, you 42:14would use the level two to un to see the 42:18bid and the ask, but most platforms are 42:20going to tell you this. So again, this 42:22is the bid.42:23This is the ask. Okay. So if I get in,42:27let's say the bid is at $7 again and the 42:30offer is at 71. When I buy it, where am 42:32I going to get filled? I'm going to get 42:34filled on the ask. So what I will do 42:36whenever I'm getting in is I place a buy 42:40limit order on the current ask price. So 42:44if I want to buy this right now and I 42:47don't want to pay more than 701, I will 42:51place a buy limit order at 701.42:56Okay? And whenever I want to sell, I can 42:59either go market, right, which is I'll 43:01just get out immediately at the best 43:03price available, or I could place a sell 43:06limit order on the bid. So whenever I'm 43:09buying, I'm buying on the ask. Whenever 43:11I'm selling, I'm selling on the bid. So 43:13that's what I would do, right?43:15[clears throat] So if I'm going short, I 43:17want you to think about it. If I'm going 43:19short, what kind of order am I going to 43:21place? Well, I'm going to be placing a 43:23sell limit order where a sell limit 43:26order on the bid. Okay, in that case,43:31I'm paying that this price or better. So 43:34if the price goes down, I'm not going to 43:37get filled late, right? Or let's say I 43:40place a buy limit order. Where am I 43:41going to place that? on the ask, I'll 43:43place it at 701. In that case, if prices 43:45jump to 702 or 703 or 704, I'm not going 43:49to get filled late because it's a limit 43:51order. I'm only willing to pay that or 43:54lower. So, if I place a limit order at 43:57701, that means I only want to get 43:58filled at 71 or better. So, I can get 44:01filled at 71 at $7 or $6.99, right? But 44:04I'm not going to get filled at 702. And 44:07that's what ensures I won't get filled 44:09late. So that's exactly why I place buy 44:12limit orders on the current ask or 44:14whenever I'm going short, I will place a 44:16sell limit order on the current bid.44:19Now, that honestly might sound a little 44:22bit confusing, especially if you're a 44:23beginner. Don't worry, that's fine,44:26okay? If this still sounds confusing,44:27don't worry. I'm going to cover it later 44:29in this free course. Uh, but that was 44:31basically a crash course on how the bid 44:33and the ask works and how spread works 44:35and how I place my orders. I play I 44:37place buy limit orders on whatever the 44:39current offer is to make sure I get 44:41filled here or better and I don't get 44:43filled late. Whenever I'm going short, I 44:45place sell limit orders on the bid 44:47price. And that ensures I either get 44:49filled at $7 or better and I don't get 44:51filled late if the price continues to 44:53drop. Okay, hopefully that makes sense.44:56And my recommendation is to just 44:58practice this. Okay, and let me know in 45:00the comments if you do have any more 45:01questions about this. Happy to clarify 45:02anything. Fantastic. Let's go ahead and 45:04talk about what a stop order is. And 45:06you've probably heard of this because 45:08I'm sure you've heard of stoploss. Well,45:10a stoploss order is a stop order. Okay,45:13so by definition, a stop order becomes a 45:17market order once the price hits your 45:19stop level. Most people use this to 45:22protect themselves from big losses. So,45:25hypothetically,45:27you bought Nvidia at $120. Okay, Nvidia 45:30triggers a breakout and you bought it at 45:33120 right here and you set a stop order 45:36at 115. Let's say your stop order is at 45:39115 45:41right here. And this is a sell stop 45:43order. Okay. If the price drops to 115,45:47it will trigger a market order to sell 45:50your shares. That's really important.45:51So, let's say that again. If the price 45:54drops to 115, that means the price drops 45:57to 115, it will trigger a market order 46:00to sell your shares. So, it will exit 46:02you as soon as your stop order is hit 46:07when prices hit 115. Now, keep in mind 46:10because it will trigger as a market 46:12order, it's not guaranteed to fill you 46:15at exactly 115. It might fill you at 46:18115. It might also fill you at 11480 46:22or 11490 or 11510 or 11515, right?46:26Because it's a market order. We already 46:28talked about that a market order gets 46:31you out at the best available price. And 46:33we already talked about that if it's an 46:35illlquid stock or if there's a lot of 46:37spread or if it's a really fastmoving 46:39stop um stock, it might not fill you at 46:42the exact price where you placed your 46:45order. Okay? So, if you place a stop 46:47order at 115 and it triggers, it might 46:50not actually fill you at 115. It will 46:52fill you at whatever the best available 46:54price is when the order executes, which 46:56could be 11490,46:58it could be 11460, could be 11510,47:02right? It completely depends. Okay, so 47:06let's go over another example. Um, you 47:08could also place stop orders when you 47:10want to enter into a trade. So, let's 47:12say Nvidia is at $120. Okay, let's erase 47:16this example. Let's say Nvidia is 47:18already at $120 47:21right here. Okay,47:24but you want to enter the trade if the 47:26price hits 130. Meaning, let's say it's 47:28at 120. You don't want to get in at 120.47:30You want to get in at 130 right here.47:35Because let's say, I don't know, if it 47:37hits 130, it officially triggers a 47:40weekly setup and there's a breakout on 47:43the weekly time frame. You only want to 47:46get in if prices hit 130. So, what you 47:49can do is you place a buy stop order at 47:54130. And this will only trigger if 47:56prices move up and hit 130. Okay? So,48:00you could place, you know, stop orders 48:03when it comes to protecting yourself 48:05where you're in it long and you place a 48:07stop-loss order wherever your stop loss 48:10is. Or maybe you're in it short. Maybe 48:12it's a breakdown, right? You get in 48:15right here at 120 and let's say your 48:18stop loss is at 130. Hypothetically, you 48:22would place a stop loss at 130 and then 48:23if prices go back up to 130, it would 48:26exit you out of your position. Okay? So,48:28you could either do it to exit your 48:30trades or you could even do it to enter 48:31into your trades where like in this 48:33example, prices are at 120, but you only 48:36want to get in if prices hit 130. So,48:39you would place a buy stop order at 130 48:41and it would only execute once prices 48:45move from 120 to 130. So, this could 48:48help you limit losses, but it may 48:50execute slightly below your stop due to 48:52volatility, right? We just talked about 48:54that how because it's a market order,48:56you're not guaranteed to get filled at 48:58the exact price that you want, right?49:00And same thing with this. If you place a 49:02buy stop order at 130 and prices move up 49:05and hit 130, it might not fill you at 49:07130. It might fill you at 12950. It 49:09might fill you at 13030, right? Again,49:12depending on how fast the stock is 49:14moving. So, this allows you to place 49:17orders ahead of time if price hits a 49:20certain level, right? So, if prices go 49:22to 130, it'll fill my order and it'll 49:24it'll trigger me into the trade. Or 49:26let's say it's a short, right? Let's say 49:29this is 100. You only want to get in if 49:32prices hit 90, right? In that case,49:35you'd place a sell stop order at 90 and 49:38then prices need to go down to 90 to 49:42fill your order and you would get 49:44executed here as a market order. Okay?49:47So, you could use stop orders either to 49:50exit out of trades by using by using 49:52just a traditional stop-loss order like 49:55probably what you've heard of, you know,49:56that we just showed where you're in a 49:58trade, you place a stop-loss. If it hits 50:00your stop, you're out of the trade to 50:02protect yourself from further downside.50:04Or you could even use it to enter into 50:05trades where you want prices to move up 50:08to a certain key level to get filled or 50:11if you're in it short, you want prices 50:12to drop to a certain key level before 50:14you get in in the trade short. So 50:17hopefully that makes sense. Um, and 50:18yeah, make sure you rewatch this clip 50:21and the other clip, the limit order, a 50:23couple of times to really understand 50:24what this means. And my suggestion is to 50:27go and practice this. Open up your 50:28platform and start taking taking stop 50:31order trades and start taking limit 50:33trades as well, just to get a feel of it 50:35and just to get some practice in. Let's 50:37go ahead and talk about what a stop 50:39limit order is. And just like the name 50:42suggests, a stop limit order combines a 50:45stop order and a limit order. So once 50:47your stop price is reached, instead of 50:50it triggering as a market order like I 50:53talked about in the last example,50:55instead it triggers as a limit order. So 50:58instead of a market order, it triggers 51:00as a limit order. So let me explain why 51:02this is important and how it works. So 51:05let's say you're watching Nvidia at 51:07$120.51:09You've identified a resistance level at 51:12125. Price has tested it multiple times,51:15but it hasn't broken through yet. Okay?51:17So, let's say you're looking at Nvidia.51:19You see a consolidation, and the current 51:21price is $120.51:25[snorts] And this key resistance level 51:27is right here at let's say $125.51:33Fantastic. you strongly believe that if 51:37it breaks over 125, it could rally 51:40quickly to 130. So let's say this is 51:42your target at 130. You're confident 51:45that if prices break 125 and it breaks 51:48out of this resistance area, it could 51:49easily go to 130. Great. So what you can 51:53do to execute on this order is you could 51:56place a buy stop limit order. Okay? So 52:00your stop price would be 125, right?52:03Just like in the other [snorts] example 52:06that we just went over when when we went 52:08over what a Whoops. When we went over 52:11what a stop order is, you could place 52:14your stop order at 125, right? So,52:18meaning if prices go up to 125, it would 52:22trigger your stop order and you would 52:24get into the trade. Now, a traditional 52:26stop order, that order would trigger and 52:29execute as a market order, meaning you 52:31might get filled at 125. You also might 52:34get filled at 12510 or 12530 or 12570 or 52:39even 126. It might fill you late because 52:42this stop order is triggering like a 52:45market order, right? Maybe it fills you 52:47even below. Who knows? It depends how 52:48the stock moves. But the point is,52:50you're not going to get your exact price 52:52at 125. You might get above your exact 52:56price or below your exact price. And 52:58that uncertainty is unsettling for a lot 53:01of traders. Who knows? Maybe the stock 53:03moves really quickly, right? It hits 53:06your stop order at 125, triggers a 53:08market order, and it fills you at 127,53:11right? It fills you at 127, and now 53:13you're in the trade $2 late, and you 53:16don't like that. So what you can do to 53:18protect yourself from that situation is 53:20instead of using a stop order, you would 53:23be using a stop limit order. So when you 53:27add the limit part of this into the 53:30equation, right? What you could do is 53:32you place your stop price at 125, great.53:35So when prices hit 125, great. Instead 53:38of it triggering a market order, it 53:41would trigger a limit order. and you 53:43could do a buy limit order at 12550. So 53:47let's say that happens. Let's say you 53:50place an order, a stop order at 125 and 53:54when the stop is hit, then the limit 53:56order activates at 12550.54:01So keep in mind, what does a limit order 54:03do? Let's go ahead and remind ourselves 54:06what a limit order does.54:08A limit order sets the maximum price 54:11you're willing to pay when you're 54:13buying. It sets the maximum price. So 54:15basically 54:17with this limit order triggering at 54:2012550, it's either going to fill you at 54:2312550 or lower. Meaning that let's say 54:28the stock moves really fast and by the 54:30time this triggers it pops really fast 54:33to to 12570 or 126 or 127, it's not 54:37going to fill you up there. It's not 54:38going to fill you late. It's only going 54:40to fill you at 12550 or lower. Okay? So,54:45if Nvidia's price hits 125, your buy 54:49stop triggers your limit order 54:53activates, right? So your buy stop would 54:54trigger and as soon as that's triggered 54:57it would activate your limit order and 54:59you will only get filled if the price is 55:01at 12550 or lower. You will not get 55:05filled if the if the price spikes too 55:09fast and too high. You won't get filled 55:11at 126 or 127. You're only going to get 55:13filled at 12550 or lower. It's like me 55:16saying if the stock proves itself and 55:20breaks above resistance, right? If it 55:22breaks above 125, I want to get in.55:25However, I only want to get in if I can 55:27get a reasonable fill. I only want to 55:29get in if it fills me at a reasonable 55:31price. And you could set what that 55:33reasonable price is. You could set this 55:35instead of 12550,55:38you could set this at 12510.55:42Right? In that case, if this triggers 55:45your limit order activates, right?55:48you're only going to get filled at 55:50either 12510 or better. You won't get 55:52filled late. Now, the downside is maybe 55:55it's fast. Maybe it goes up right away 55:57and it doesn't even it just flies by 56:00your limit order. In that case, you 56:01won't get filled. However, at least 56:03you're not in it late versus, you know,56:05if you used a regular stop order, it 56:08would fill it would fill you market and 56:11you might be super late on the trade.56:13Okay, does that make sense? So, in 56:15summary, I know that might be a little 56:16bit confusing. In summary, whenever 56:19you're placing this type of, you know,56:22stop limit order, it's always going to 56:24ask you what's your stop price. Like on 56:27your platform, it's always going to ask 56:28you what's your stop price and what's 56:31your limit price. Okay? So, you have to 56:34put in the stop price first. In this 56:36case, I want to potentially get in if it 56:39breaks above this resistance, right? If 56:41it breaks above 125, that's the trigger 56:43for my setup. I want to get in. So, your 56:45stop price would be 125.56:47However, I don't want to pay 126 for 56:50this. I don't want to pay 127. I don't 56:52want to get in late at 128. I want to 56:54make sure that if it hits my stop at 56:56125, right? I want to make sure that my 56:59average price is no greater than 12550.57:04I'm okay with being 20 cents late, 30 57:07cents late, even 50 cents late. However,57:08I'm not okay with being even 60 cents 57:10late, which would be at 12560. I'm not 57:13okay with being $1 late, which would be 57:15at 126. No, I want to get filled at 57:1812550 57:19or better. And this allows you to 57:22control the price that you get filled 57:23at. So, it's a really useful way to make 57:26sure that if you have a if you're 57:27getting into a trade using a stop order,57:30well, you're not going to get filled 57:32super late when it ends up triggering as 57:34a market order. You could you could 57:36place a stop limit order and you'll get 57:38filled, you know, at a you you make sure 57:40you won't get filled at too high of a 57:42price. Okay? I don't recommend doing 57:44this uh when it comes to exiting a 57:46trade, right? Like let's say you're 57:48already in a position. Let's say you're 57:50in this breakout long. I don't recommend 57:54placing a stop limit order here, right?57:57Because if you're exiting a trade, you 57:59want to get in, you want to get out as 58:01soon as possible. You don't want to like 58:03imagine you leave your desk and you have 58:05a stop limit order here. Who knows, it 58:07might not fill you and all of a sudden 58:09you're in the trade as it's going 58:10against you. So, when it comes to 58:11exiting, I would just use a regular 58:15stop order where it'll just fill you 58:17market at whatever the price is. But 58:19whenever you're entering, you also have 58:21the option of using a stop limit order 58:22to make sure you control the price that 58:24you get filled at. Okay? Hopefully that 58:25makes sense. And my recommendation,58:27guys, is based off my explanation here,58:30I would load up your trading platform. I 58:32would re-watch every single one of these 58:34explanations and as I'm explaining it, I 58:37would literally, you know, do what I am 58:39explaining. I would literally go on your 58:40platform and place these types of 58:42orders. You could do it on maybe on a 58:43simulation with paper trading so you're 58:46not risking real money and you could 58:47practice and you could see how it all 58:50plays out in real time. That's my 58:51suggestion. So do that and yeah, I'll 58:55see you in the next video. Let's go over 58:56some key trading terms. And to make this 58:59as convenient as possible for you, I 59:01actually uploaded all of these terms 59:03onto a word document. And you can 59:05download this document in my free course 59:08community. So, if you go to the 59:10description of this video, you click on 59:12the link to join my free community, and 59:14you go into the free course, the same 59:16one that you're watching right now, you 59:18could actually go to the key trading 59:20terms video, and right under that video,59:23you will be able to find this PDF 59:25document, and you'll be able to download 59:27it or even print it. So, make sure you 59:29join up in my free course community 59:31because I'm going to be posting way more 59:34resources for you, such as other PDFs 59:37and frameworks that you can download and 59:39print out that will really help your 59:41trading. I also do bi-weekly live 59:44trainings that you can sign up for, of 59:46course, as well in my free community.59:48So, that's probably the easiest way for 59:50you to review this and for you to refer 59:52back to it. So, download that file and 59:54I'll see you on the next video. Hey 59:56guys, the topic for today's class is the 1:00:00differences between technical and 1:00:02fundamental analysis. And we're still 1:00:04super early on in the course. So, I 1:00:06figured it'd be very important to 1:00:08actually touch up on technical analysis 1:00:10and fundamental analysis. And um if you 1:00:13guys haven't heard of those terms, this 1:00:17usually these are the terms that 1:00:19describe how to analyze a particular 1:00:22security. you know, it mostly applies 1:00:24for, you know, stocks and it does also 1:00:27apply for crypto, but I think it was 1:00:29coined mostly for stocks, right? And,1:00:33you know, I'm sure you've probably heard 1:00:34one is superior to the other. So, I'm 1:00:36here going to tell you exactly what they 1:00:39are, what to focus on, and [snorts] how 1:00:42you can begin using them. Okay, so let's 1:00:45start out with technical analysis.1:00:48Technical analysis is focusing on 1:00:51reading price action. Okay, that's what 1:00:55we're focused on. reading historical 1:00:57price trends and price action in order 1:01:01to determine whether we're going to go 1:01:04long or short or determine our our 1:01:07outlook on the stock for whether it's 1:01:10you know during the intraday time frame 1:01:12whether it's you know few hours few 1:01:14minutes or even you know few days even 1:01:17few weeks few months away okay so two 1:01:20the two buzzwords or the two buzz terms 1:01:22are price action and price trends 1:01:26Okay. And technical analysis for trading 1:01:31specifically for trading. And that's 1:01:33what this course is about. We're here to 1:01:35learn about trading. Technical analysis 1:01:38is the only way to analyze a stock for 1:01:43the short term, right? Because as 1:01:45traders, [snorts]1:01:47we're operating kind of on a short-term 1:01:49basis. Even if we're approaching 1:01:52longerterm trades, you know, trades that 1:01:54are, you know, several months or, you 1:01:55know, several weeks, um, that's still 1:01:58short-term enough where you can actually 1:02:00where you're going to be using technical 1:02:01analysis. Okay? If you're looking, you 1:02:04know, 10 years out, 5 years out, trying 1:02:08to figure out the value of a stock, of 1:02:10course, then we're going to use 1:02:11fundamental, but I'm [snorts] going to 1:02:12I'm going to get into fundamental 1:02:13analysis in a second here. I just want 1:02:15to finish up with technical analysis. So 1:02:18the whole point the whole goal of this 1:02:20course is to actually teach you guys 1:02:22technical analysis and that's only one 1:02:25part of trading but it's it's one of the 1:02:27most important parts because ultimately 1:02:29that's how we're going to predict you 1:02:31know price action is is by reading uh 1:02:34prior price action you know the way the 1:02:37candlesticks look the way the moving 1:02:39averages look. We're reading all of this 1:02:41to make um intelligent decisions on 1:02:45where to put our money and what trades 1:02:46to actually take. Okay? And that's why 1:02:49technical analysis is king.1:02:53If you guys aspire to be successful 1:02:55traders, you must innately understand 1:02:58technical analysis. And this is what you 1:03:00should be focusing on technical 1:03:02analysis. Not and we're going to get 1:03:04into anal fundamental analysis.1:03:06Fundamental analysis is basically 1:03:09looking and reading the intrinsic value 1:03:12of a security, of a stock, of a crypto,1:03:14the intrinsic value. So, you're going to 1:03:16be looking at um you know macroeconomic 1:03:19trends. You're going to be looking at 1:03:20financial statements of the company.1:03:22You're going to be looking at [snorts]1:03:23intellectual property. You're going to 1:03:25be trying to read the company's worth,1:03:28right? And based off you know how 1:03:31valuable the company is you know what 1:03:33they offer whether um you know uh you 1:03:36know their products are trending you 1:03:38know for a longer term scale or um you 1:03:42know just reading the actual value of 1:03:43the company you know we're able to 1:03:45establish you know if this is a good 1:03:47investment but this is what you have to 1:03:49understand fundamental analysis is you 1:03:51know for the longer term for 5 10 15 20 1:03:5525 years down the road right we can't 1:03:57read uh you know we can't read shorter 1:04:01term trends using uh fundamental 1:04:05analysis. Okay. So for our purposes here 1:04:08for for you know purposes of trading and 1:04:10actually before I get into that I just 1:04:12want to uh give you guys a quick 1:04:13example. The reason why a lot of people 1:04:16um you know unsuccessful traders a huge 1:04:19reason is because they actually pay 1:04:20attention to news which at the end of 1:04:22the day you know news about a company 1:04:23news about a crypto at the end of the 1:04:25day that's fundamental information 1:04:27that's not technical information right 1:04:29that's not about price action it's about 1:04:30something the company did something the 1:04:32company acquired right um certain news 1:04:34going around the company people focus on 1:04:37that and they actually enter trades just 1:04:40based off the news just based off 1:04:42recently heard fundamental information 1:04:45and this is the one of the biggest 1:04:47mistakes you can make. You know, why 1:04:49would you, you know, buy something when 1:04:53um, you know, you're hearing about the 1:04:56news the last we're the public. We hear 1:04:58about the news literally last. Think 1:05:00about all of the uh, you know,1:05:02shareholders or people, you know,1:05:04insiders in the company. They heard 1:05:05about this news weeks ago, months ago.1:05:07the news that you're hearing on a 1:05:08day-to-day basis about stocks,1:05:10companies, crypto, it's already priced 1:05:12into it. Okay? So, stop relying on that 1:05:15information. Sorry for this tangent, but 1:05:17it's extremely important. Stop relying 1:05:19on this information. Okay? It is 1:05:21pointless. It will it will only lead to 1:05:24um you know bias in your trading and and 1:05:28a complete lack of objectivity. Okay?1:05:31And that's why you know in order to have 1:05:33objectivity in trading, we have to read 1:05:35the price action. We have to read what 1:05:36the charts say in the charts like this 1:05:39one here shows you price action. Okay.1:05:41And those are the main differences. So 1:05:43key points here is is uh focus on on 1:05:46technical analysis and you don't really 1:05:49need fundamental analysis for trading at 1:05:52all. I mean I'll tell you the truth. I 1:05:54have never researched a company in my 1:05:55life for that I'm trading. Doesn't 1:05:57matter to me, right? I've never looked 1:06:00at news. There's only the only news that 1:06:02could be interesting is like let's say 1:06:04uh the Fed is having a meeting that 1:06:06could be impactful or looking at news 1:06:08that could affect stocks you know during 1:06:10the intraday time frames meaning like 1:06:12during the day let's say some news comes 1:06:14out and a stock drops super hard you 1:06:16that might be interesting to you for a 1:06:18potential trade but besides that you 1:06:20guys should not be focusing on news or 1:06:22fundamental analysis divert um you know 1:06:26all of your attention towards technical 1:06:28analysis read and reading price action 1:06:31Okay. And that's what we're going to be 1:06:34teaching now, you know. So, I hope you 1:06:37guys found this helpful. Okay. Hope you 1:06:39guys understand the differences and 1:06:40which ones to really focus on. And let's 1:06:42get on to the next video in the course.1:06:44Real quick, I believe in transparency 1:06:46and I would never make a claim that I 1:06:48make money with trading without showing 1:06:51concrete proof. So, this is my Charles 1:06:53Schwab brokerage account. I day trade on 1:06:56Think or Swim. And over the last one 1:06:58year, from October 4th of 2024 to 1:07:01October 3rd of 2025, I've been able to 1:07:03generate $529,000 1:07:06in day trading profits, which is a 1:07:08cumulative rate of return of over 340%1:07:12on my entire trading account. And some 1:07:14people may think this is Photoshop or 1:07:16this is some sort of screenshot that I 1:07:18edited. Well, if I go ahead and refresh 1:07:20the page on my Charles Schwab brokerage 1:07:23login and I go back to one year, as you 1:07:26can see, there's the $529,000.1:07:28And the reason I'm showing you this is 1:07:30to be real and as transparent as 1:07:32possible. So, in this video, I'm going 1:07:34to show you the exact process that I 1:07:37followed to become a profitable trader.1:07:39And a lot of what I'm about to teach 1:07:40you, my dad taught me 5 years ago. And 1:07:43it's honestly the reason I'm a 1:07:45profitable trader today. I'm not showing 1:07:47you easy strategies. I'm not going to 1:07:49show you plug-and-play indicators that 1:07:51lead to easy money and oh, use this 1:07:53support and resistance structure to find 1:07:56entries. No, I want to show you the 1:07:58nobullshit process that you could follow 1:08:01right now to actually make this happen 1:08:03so you could hopefully become a 1:08:05full-time trader by the end of the 1:08:07process. And the first step is critical.1:08:10The first step is important. Focus on 1:08:13your education. Okay? A lot of people, a 1:08:16lot of traders, they just want to jump 1:08:17into the markets, fund their account,1:08:19and instantly make money. That's not how 1:08:22it works. And in fact, in all areas of 1:08:25our life, and every other profession out 1:08:28there, you need to educate yourself 1:08:30first. You have to go to school. For 1:08:32example, if you want to become an 1:08:34engineer or a lawyer or a doctor, you 1:08:37basically have to get a degree for any 1:08:39job out there, right? You have to go to 1:08:41school for four years to educate 1:08:42yourself. Yet most traders, especially 1:08:46beginners, they don't want to, you know,1:08:48focus on the education. They just want 1:08:50to make quick money. Well, that's not 1:08:52how trading works. And when you're 1:08:54focusing on your trading education, you 1:08:56want to focus on one core methodology.1:08:59You don't want to be bouncing from this 1:09:01strategy to this strategy, and try this 1:09:04methodology out, then that one, then 1:09:05this one, right? want to stick with one 1:09:07because every single methodology, it's 1:09:10going to teach different principles and 1:09:13it's honestly going to confuse you. And 1:09:15I see this all the time where traders,1:09:16they just bounce around from one thing 1:09:18to another and they never stick in 1:09:20master just one strategy or one 1:09:22methodology, right? You want to build 1:09:25the foundation for your trading success.1:09:27And [clears throat] if you think of a 1:09:30skyscraper that is being built, the 1:09:33engineers, the architects, the project 1:09:36managers, they all focus on building the 1:09:40foundation first. In fact, they spend 1:09:42most of the time working on the 1:09:44foundation because the foundation is 1:09:46what ensures that uh building doesn't 1:09:50collapse three or five or 10 years later 1:09:53because of a crazy storm. And that's the 1:09:55way I want you to think about your 1:09:57trading. Just like how the foundation of 1:10:00a building is built strongly so that 1:10:03building obviously doesn't collapse 1:10:05later on. That's how you need to 1:10:07approach your trading. You have to focus 1:10:09on building the foundation. So what goes 1:10:12into that? Well, number one, your edge.1:10:14What is your edge right in your trading 1:10:18system? What's going to differentiate 1:10:20you from every single other trader out 1:10:23there? And the only way to develop an 1:10:25edge is to educate yourself. Focus on 1:10:28the education. It's your mindset, right?1:10:31Are you going to approach trading with a 1:10:33conservative mindset or an aggressive 1:10:35mindset? How are you structuring your 1:10:37expectations when you go into trading?1:10:40Of course, price action principles. How 1:10:42are you reading charts? Are you using 1:10:44any indicators? If so, how many? Right?1:10:47Which price action principles are you 1:10:49looking for in a setup or rules within 1:10:53your plan? Right? I think you're only as 1:10:55profitable as how strict your rules are 1:10:59within your plan. And that's part of the 1:11:00reason why I'm a profitable trader today 1:11:02is because I'm very disciplined with the 1:11:05constraints within my plan. I don't 1:11:07deviate from my system. Of course, trade 1:11:11management, right? When you enter into 1:11:13the trade, where are you taking profits?1:11:16Are you moving your stop loss? Are you 1:11:17taking half profits and leaving a 1:11:19runner? Or are you taking full profits 1:11:21at target one? Right? Entering into a 1:11:24trade is the first step. The second step 1:11:26is extracting profit from that trade.1:11:29You need a game plan for that. And of 1:11:31course, risk management, which by the 1:11:33way, I probably should have started out 1:11:34with this one. This one is by far the 1:11:37most important. In fact, most of your 1:11:39foundation is going to be built around 1:11:42risk management and limiting your 1:11:44losses. Listen, I know you're excited. I 1:11:47know you want to fund your account. You 1:11:49want to start making money. However, I 1:11:51emphasize, please focus on your 1:11:54education. Focus on building this 1:11:57foundation for your trading because your 1:11:59goal isn't to just make money over the 1:12:01next few months. Your goal is to make 1:12:03money in 5 years, in 10 years with your 1:12:06trading. And the only way to ensure 1:12:08long-term profitability is to build this 1:12:12foundation for success and focus on the 1:12:14education. And if you don't know where 1:12:16to go for this, I have hundreds of hours 1:12:19of free education on the internet. Not 1:12:21only on this YouTube channel that you're 1:12:23watching right now. So I strongly 1:12:25encourage you to watch my other videos 1:12:26on this channel, but I also have a free 1:12:2910 plus hour trading course that is 1:12:31genuinely better than most paid courses 1:12:33on the internet. It will help you build 1:12:35this foundation. So, you could find my 1:12:37free course in the description of this 1:12:39video. Take advantage. Let's move to 1:12:41step number two. Now that you've 1:12:43educated yourself, you know a few 1:12:45strategies, you know how to calculate 1:12:46risk and size your positions, you know 1:12:49how to limit losses, you know what 1:12:51criteria you're looking for in your 1:12:54setups, and you have a methodology. From 1:12:56there, you're probably excited. You're 1:12:58ready to practice, and you're ready to 1:13:00apply what you just learned. And this is 1:13:04by far the most important step. It's the 1:13:06application, right? You can read books,1:13:10watch videos on how to drive a car, but 1:13:13until you're behind the wheel and 1:13:15driving every single day, you're never 1:13:17going to become a confident driver.1:13:19Like, imagine you're on the highway for 1:13:21the first time. Are you going to feel 1:13:23comfortable merging? Are you going to 1:13:25feel comfortable going fast? No, of 1:13:28course not. You need repetition. You 1:13:30need practice. And the most important 1:13:33part of this step, and this is where 1:13:35most traders actually they get this 1:13:37wrong, is when you start practicing, you 1:13:41either want to paper trade, which is 1:13:43trading with fake money, or you want to 1:13:45be trading with very small risk. What 1:13:48most traders do, is that once they've 1:13:50learned the education, great, they fund 1:13:53their account and they start using big 1:13:55risk. And you know when you're using big 1:13:58risk during this experimentation phase 1:14:01where you're testing your strategies,1:14:03you're testing setups, right? You're not 1:14:04going to become profitable right away.1:14:06You're going to make mistakes. You have 1:14:08to figure out what works for you. You 1:14:10have to figure out what doesn't work for 1:14:11you. So why would you risk a lot of 1:14:14money in this beginning stage of 1:14:16learning, right? When you begin live 1:14:19trading, you need to paper trade or 1:14:21trade with small risk. When I say small 1:14:23risk, I'm talking like1 to5 a trade.$1 1:14:27to $10 a trade. Something so small. So 1:14:29even if you have 10 losers in a row and 1:14:32you're risking five bucks a trade, okay,1:14:34you lost $50. That's not a big deal.1:14:37That's not so bad. You're going to learn 1:14:38a lot through those 10 trades, but 50 1:14:40bucks, that's not going to blow up your 1:14:42account. That's the goal, right? And you 1:14:44want to take a lot of trades. You want 1:14:46to experiment with your strategies. Even 1:14:48if some of the setups are lower quality,1:14:51that's fine. experiment with it so you 1:14:53could learn through experience and just 1:14:56take a ton of trades and practice 1:14:59everything that you just learned in the 1:15:01education. Keep in mind that during the 1:15:03step two application phase, your focus 1:15:06shouldn't be to make money. I don't want 1:15:09you to care about the end result of 1:15:12every single trading day. I want you to 1:15:14detach yourself from the outcome and 1:15:18focus on the process. And specifically,1:15:20you're going to be focusing on what is 1:15:22working in your trading and what isn't 1:15:25working in your trading. And the only 1:15:27way that you could figure that out is 1:15:30through step number three, data 1:15:32collection and observation. And this is 1:15:34when you're going to be journaling your 1:15:37results. And no, I don't mean your 1:15:40profits. Okay? I don't care how much 1:15:42you're making dayto-day. I want you to 1:15:43journal what strategies you resonate 1:15:47with, what types of stocks are you most 1:15:49profitable with. For example, for me, I 1:15:53really gravitate towards mid to low 1:15:56caps, and I don't really like trading 1:15:58stocks that are over like $50 to $100. I 1:16:01also don't really trade the name brands.1:16:03So, I won't day trade Tesla or Amazon or 1:16:06Apple. I just don't really gravitate 1:16:08towards those types of stocks. Now,1:16:10other traders may gravitate towards 1:16:13them, right? I just know what I like 1:16:15because I figured that out very early in 1:16:17my trading career. Another another 1:16:19example is with the strategies that I 1:16:21resonate with. I really like breakouts.1:16:23I like breakouts more than I like 1:16:26retracement setups. Now, retracements 1:16:28are still within my trading methodology,1:16:30but I always naturally gravitated 1:16:33towards trading breakouts, right? That's 1:16:35just what works for me. But that might 1:16:37be different for you. That might be 1:16:39different for every single trader. Same 1:16:41thing with the trade management. For me,1:16:43I really enjoy scalping. I love kind of 1:16:47getting in and out of positions quick,1:16:49right? I get big size. I go for a bit 1:16:52smaller moves and I'll take profits 1:16:54quick and I'll do that a lot of times 1:16:56every single day and my profits really 1:16:58add up. And that's what I like to 1:17:00gravitate towards. right now. I do other 1:17:02styles of trading as well where I'll get 1:17:05in and I'll hold that trade for a few 1:17:06hours, but I wouldn't say that's my 1:17:09bread and butter. I still know how to do 1:17:10it. I still do it almost every single 1:17:12day, but that's not like my breadand 1:17:14butter strategy. So, you need to figure 1:17:16out what you resonate with. What style 1:17:18of management do you like? Do you like 1:17:21kind of getting in and out quick, which 1:17:22is a lot more active, or do you like 1:17:25perhaps getting into something in the 1:17:27morning and then waiting until, you 1:17:29know, the end of the day to get out? And 1:17:32the only way that you're going to figure 1:17:34this out is to apply, is to practice and 1:17:39trade everything that you've learned in 1:17:42your education. And as you're practicing 1:17:44in trading, I want you to be journaling 1:17:46what you're gravitating towards and what 1:17:48strategies are making you money. And I 1:17:51want you to do what makes sense to you.1:17:54Do what you resonate with. When you take 1:17:57a trade, you usually get a really good 1:17:59feeling about it. And there's always 1:18:01going to be a style of trading that 1:18:02you're like, "Yeah, I just like this. I 1:18:05could feel it." You know, and you almost 1:18:07develop an intuition for that style. And 1:18:10that's, you know, that's what I want you 1:18:11to accomplish through this data 1:18:12collection and observation point. Now,1:18:14in the beginning of your journey, you're 1:18:17not going to know exactly what you 1:18:19resonate with at first. You're not going 1:18:21to know what strategies are most 1:18:22profitable for you. That's going to take 1:18:24time. And that part is difficult to 1:18:27really identify. But what isn't 1:18:29difficult to identify is figuring out 1:18:31what's not working in your trading. It's 1:18:33pretty easy to figure out what's 1:18:35consistently not making you money. So, I 1:18:38want you to to really focus on that.1:18:40Focus on what isn't working. Example,1:18:43maybe every single day you start the day 1:18:46down 2 to three hours. Every day at the 1:18:49market open, you start the day down two 1:18:50to three hours. Perfect. Stop trading 1:18:53the market open. Eliminate that from 1:18:54your trading plan. Maybe you know 50% of 1:18:58your trades are going for reversals and 1:19:01you're consistently losing money on 1:19:03reversals. Fantastic. stop trading 1:19:05reversals or just be way more selective 1:19:08with reversal setups. You get the idea.1:19:10Figure out what isn't working and then 1:19:12eliminate it. And then what you're going 1:19:14to be left with are strategies and the 1:19:16styles that are working for you. Let's 1:19:18move to step number four. Focus on 1:19:21breaking even consistently and raising 1:19:24risk gradually. Your first priority as a 1:19:28beginner trader isn't to become 1:19:30profitable. It's to become a 1:19:32consistently break even trader. A break 1:19:34even trader is someone who doesn't lose,1:19:37who knows risk management, who knows how 1:19:39to limit their losses. And by becoming a 1:19:42break even trader first, when you know 1:19:45you're consistently not losing, that's 1:19:48going to give you a lot of confidence.1:19:50And that confidence is what you need to 1:19:52become profitable. So, in the beginning,1:19:55when you're just starting out, you don't 1:19:57want to go from beginner to profitable.1:20:00You want to go from beginner to 1:20:01consistently break even and then break 1:20:04even to profitable. Once you're a break 1:20:06even trader and you're not losing every 1:20:09single day, you're like 80% of the way 1:20:11there towards becoming a profitable 1:20:13trader. And as long as you're focusing 1:20:16on step one, step two, step three, and 1:20:18step four, and you're putting in the 1:20:20work, you're consistent, you're 1:20:22disciplined, you're going to see some 1:20:24genuine progress. In fact, you might 1:20:26even begin making money with like $1 to 1:20:29$10 risk where maybe you're making $10 a 1:20:31day, $20 a day, you know, $30 the next 1:20:34day, 10 the next day, 40 the next day,1:20:36right? And you're seeing that results 1:20:38are starting to come in. Now, a big 1:20:39mistake that traders make is that they 1:20:42go from like$1 to $10 risk to like a 1:20:45$100 risk or a $1,000 risk instantly.1:20:48You don't want to do that. In fact, if 1:20:51you can't make money with $1 to $10 1:20:53risk, you won't be able to become 1:20:55profitable with $1 to $1,000 risk. Keep 1:20:58that in mind. And you want to raise your 1:21:00risk gradually. And you don't want to 1:21:04just, you know, quadruple your risk 1:21:06overnight. If you're risking like one to 1:21:09$5 per trade, go from like one to five 1:21:12then to 5 to 10. If you're risking $10 a 1:21:15trade, go to 15. If you're risking 15,1:21:17then go to 25. Right? do it gradually.1:21:20And I would only raise your risk when 1:21:23you have more than two weeks of 1:21:25consistency and when you're feeling 1:21:26strong psychologically. I get asked this 1:21:28question all the time, Emanuel. When 1:21:31should I raise my risk? I feel like I'm 1:21:33ready, but I'm not sure yet. If you're 1:21:35in doubt, don't raise your risk. You 1:21:37want to be raising your risk when you're 1:21:39feeling good. You're feeling confident.1:21:42You have consistency. You now have a 1:21:44track record of success with smaller 1:21:47risk. And that justifies you raising 1:21:50your risk. If you're kind of in doubt 1:21:51and you're not sure, don't raise your 1:21:53risk. You should be raising your risk 1:21:54when you're psychologically 1:21:56strong. Okay? And in the beginning, your 1:22:00risk is actually going to increase 1:22:03rapidly and pretty quickly where I've 1:22:05seen a lot of traders go from, you know,1:22:08let's say $10 risk to a hundred or even 1:22:11$200 risk per trade rather quickly 1:22:14within a few months. But as you raise 1:22:17your risk more and more and more, that 1:22:20uh rate of increase is going to slow 1:22:23down where you might go from $10 to $100 1:22:25risk pretty quick, but then it's going 1:22:28to take more time going from 100 to 300 1:22:30or 300 to 500, etc. So, the higher your 1:22:34risk is, the slower it's going to take 1:22:36to actually raise it. Because when 1:22:39you're dealing with big risk, that's 1:22:41going to come with a lot of emotional 1:22:42and psychological impact where if now 1:22:45you're risking $1,000 per trade, that's 1:22:47going to feel completely differently 1:22:49than when you're risking $100 per trade.1:22:51And you have to understand that the 1:22:53overall process of becoming a profitable 1:22:55trader is exponential. So let's say we 1:22:58have this little graph here. We have 1:22:59time below, okay? And then we have 1:23:02profits here. Most people think that 1:23:04this process is linear. these steps that 1:23:08I just showed you in the steps in this 1:23:09video, it works like this. You put 1:23:11you're putting in a lot of time, you're 1:23:13practicing, you're building your system,1:23:15you're building your edge, but you're 1:23:16not really seeing any results. You're 1:23:18not seeing any results. And then all of 1:23:19a sudden, your results just go 1:23:21exponential as soon as things click. And 1:23:24you don't want to quit trading before 1:23:26this happens. you want to put in and 1:23:28thug it out and, you know, go through 1:23:30all the struggle, put in the time, put 1:23:32in the work ethic, be disciplined 1:23:34throughout this entire stage right here 1:23:36where you're putting in a lot of time,1:23:38but you're not seeing results because at 1:23:40some point your results are going to go 1:23:41exponential. And when this happens, it 1:23:43can completely change your life. So,1:23:45going into step five, at this point,1:23:47maybe you're feeling really good about 1:23:49your trading. You raised your risk from 1:23:51$10, now you're risking $100 per trade.1:23:54Everything is clicking. You're feeling 1:23:56invincible. you're making, you know,1:23:58four or 500 bucks a day. Maybe you're 1:24:00even making a,000 or $2,000 pretty 1:24:03consistently and you're feeling great.1:24:05Well, this is going to happen next. And 1:24:08that is you're going to see something 1:24:11like this where you see a dip in your 1:24:14trading and that goes into step five,1:24:16which is your first major setback. Okay?1:24:21And when you think you have everything 1:24:24figured out where you're making money,1:24:26you're feeling good, you're feeling 1:24:27invincible, you become complacent and 1:24:30unfortunately you stop putting in as 1:24:33much effort towards the other steps of 1:24:36the process like the data collection 1:24:38like raising risk gradually or focusing 1:24:41on the application and journaling. Maybe 1:24:43you're starting to ignore that because 1:24:44hey, everything's figured out. You're 1:24:47making money. And what happens is you 1:24:50fail to adapt when the market changes.1:24:53And I see this all the time where 1:24:55profitable traders, they lose their 1:24:58profitability. They become losing 1:25:00traders because they're not able to keep 1:25:02up with the market. You have to 1:25:04understand that the market is constantly 1:25:06changing from week to week, month to 1:25:08month, from year to year. And you need 1:25:10to always be sharpening the tools in 1:25:13your toolbox. You always need to be 1:25:16working on your trading. You always need 1:25:17to be journaling. You always need to be 1:25:19refining your process and working on 1:25:22your system. The moment you stop doing 1:25:24that, and that usually happens during 1:25:27this parabolic stage because you put in 1:25:29all this work, you're seeing those 1:25:31results going parabolic, then you relax,1:25:33you become complacent, you stop working 1:25:36on your trading, and then you see a 1:25:37major dip and you refuse to adapt. In 1:25:40fact, a lot of times, most traders just 1:25:42force the same strategies that made them 1:25:45money before. But those strategies,1:25:46they're not they're not as effective 1:25:48anymore. And you always have to be okay 1:25:52with lowering your risk, accepting, hey,1:25:55I'm not seeing the same results like I 1:25:57did 5 months ago, right? You have to be 1:26:00okay with going back to the drawing 1:26:01board, refining your system, and 1:26:04changing things around. And this happens 1:26:07to everyone. It even happened to me 1:26:08where I had a really nice parabolic move 1:26:12in my results. I was making money 1:26:13consistently and then all of a sudden 1:26:15the market kind of changed and I saw a 1:26:17big setback in my trading and from there 1:26:19and I wasn't losing money right keep 1:26:21that in mind the reason I'm profitable 1:26:23is because of how good I am at limiting 1:26:25my losses during the setback I really 1:26:28lowered my risk and then it kind of went 1:26:30like this and then I kept putting in 1:26:31more time more time working on my system 1:26:33working on my system before the next 1:26:35parabolic move up and that's kind of the 1:26:37journey as a trader you put in this work 1:26:39you see a big uptick in your results you 1:26:42see a little setback, you put in 1:26:44another, you know, a lot of time, a lot 1:26:46of work, and then you see another 1:26:47parabolic shift in your results. You 1:26:50have to be okay with adapting to the 1:26:52market. You have to be okay with change.1:26:54In fact, the only thing that is constant 1:26:57is change. And I'm going to be 1:26:59completely honest, during this first 1:27:01major setback in your trading, it is 1:27:03going to hurt your ego. You're going to 1:27:05think that you got lucky. You're going 1:27:07to think that, oh, well, maybe I'm not 1:27:09so good of a trader after all. And it's 1:27:12going to be tough to adapt and go back 1:27:15to the drawing board. It's going to be 1:27:16tough to accept that you have to lower 1:27:18your risk and kind of reset everything 1:27:21in your system. And a lot of traders 1:27:24quit here or a lot of traders over risk 1:27:27over trade and then they end up giving 1:27:30back all of their profits during this 1:27:33exponential stage in their results.1:27:36Right? You want to avoid that. Make sure 1:27:38during this setback you are protecting 1:27:41the profits that you made here. Make 1:27:44sure you lower your risk. Maybe you even 1:27:46have to go to paper trading for like a 1:27:48few days or a week just to kind of 1:27:50reset. On the other hand, when you 1:27:52overcome this setback and you see your 1:27:54results starting to go up again where 1:27:56you've adapted your trading, you've 1:27:59re-raised your risk and you're starting 1:28:01to become profitable again. Well, that's 1:28:03going to give you so much confidence and 1:28:06it's going to completely almost shift 1:28:09the way that you look at trading. You're 1:28:11going to be like, "Yeah, I am a 1:28:12profitable trader. I stayed resilient 1:28:15and I overcame that setback." And then 1:28:17any new setback that you see from here 1:28:20is going to be way shorter than this one 1:28:22because you have confidence in yourself 1:28:25that you can adapt to the new 1:28:28environment and you can overcome any 1:28:30obstacle within your trading. Let's go 1:28:32to step number six. And I have a lot of 1:28:34personal experience with this one.1:28:36Mentorship is going to expedite every 1:28:39single step of this process. And I'm 1:28:42going to be honest and blunt. If you 1:28:45don't have a mentor, it's likely to take 1:28:47years to figure this out. And the way 1:28:50that I know that is because my father 1:28:52went through that path. It took him 1:28:54seven years to become a consistently 1:28:56profitable trader because he had to 1:28:59learn through trial and error. He had to 1:29:01experiment with stuff and he never 1:29:02really learned correctly from the very 1:29:05beginning. But when he taught me, it 1:29:07only took me three and a half months to 1:29:09begin making money with trading. And I 1:29:11don't care who your mentor is. I don't 1:29:13care if you pick your friend or someone 1:29:16else on YouTube. That doesn't matter to 1:29:18me. All that I want to emphasize here is 1:29:21make sure that your mentor live trades 1:29:24with you where he or she shares the 1:29:27screen and you're able to ask questions 1:29:30in real time and you could actually 1:29:31watch their execution. That is the best 1:29:34way to learn how to trade. It's by doing 1:29:37it with your mentor. So, like I said, I 1:29:39don't care who your mentor is. But if 1:29:41you do want to learn from me, I have 1:29:43hundreds of hours of free education 1:29:46online on my YouTube channel, but also 1:29:48in my free 10 plus hour trading course 1:29:50that I mentioned earlier in this video.1:29:53But if you do want to work with me 1:29:55personally, you want me to take you 1:29:57under my wing, I do personally help 1:29:59coach and scale traders from zero to 1:30:02consistently profitable where my 1:30:03students trade live with me every single 1:30:06day. So, if you are looking for a 1:30:08personal mentor, you could apply for my 1:30:10mentorship in the description of this 1:30:12video. This was by far the most 1:30:14important piece of advice that my father 1:30:16told me when I was a beginner trader.1:30:19And for anyone that doesn't know, my 1:30:20father was the one who taught me how to 1:30:23trade at the time. And this was four 1:30:25years ago. He had been trading for about 1:30:28four to five years full-time. And now,1:30:30four years later, it's close to a 1:30:32decade. And I remember us sitting in our 1:30:35sun room and he was teaching me, he was 1:30:38showing me different strategies,1:30:39teaching me his methodology. And I 1:30:41remember he told me this really 1:30:43important piece of advice that 1:30:46completely changed my perspective as a 1:30:48beginner trader. And it helped me reach 1:30:51success significantly faster. And I want 1:30:55to share that with you guys. I want to 1:30:57genuinely help you guys learn how to 1:30:59trade. And sometimes you know with 1:31:02trading especially since since it's so 1:31:05much about your psychology your you know 1:31:08your emotions and your mindset that 1:31:11sometimes your skills are not even what 1:31:14has to be changed in order to become 1:31:16profitable. Your mindset is what has to 1:31:19be changed. So I hope especially if you 1:31:21guys are beginner traders this 1:31:22completely changes your mindset. All 1:31:25right. So a lot of people want to go 1:31:27from beginner trader and they want to 1:31:30immediately become a profitable trader.1:31:33Their number one goal is to make money 1:31:36which makes sense. I mean we all are 1:31:38doing this to make money. We want to 1:31:40become profitable. We want to make 1:31:42money. We want to buy you know whatever 1:31:44the cars, the watches. You want to take 1:31:46care of your family, go on vacations,1:31:48have a full-time, you know, do this 1:31:49full-time. Whatever the case is, this is 1:31:52generally what people want to do. go 1:31:53from beginner to profitable. But my dad 1:31:56told me that this is not the way that 1:32:00you should be going about trading.1:32:02Instead, you're actually skipping a very 1:32:05important 1:32:07part in the middle. And because you're 1:32:09not focusing on this part that's in 1:32:12between being a beginner and being 1:32:13profitable, you're actually, you know,1:32:17kind of going against yourself. You're 1:32:20actually, it's actually 1:32:21counterproductive. All right. So I want 1:32:23to explain what this is. So let's go 1:32:25ahead and erase this. And my dad told me 1:32:26that your first focus 1:32:30as a trader should not be to make money.1:32:33It should be to consistently not lose 1:32:38money. And that in other words is called 1:32:41breaking even. And my dad told me that 1:32:44if you're able to break even 1:32:48consistently 1:32:49every single day, you're able to not 1:32:52lose money, you're like 70% of the way 1:32:55there towards being a profitable trader.1:32:58So, honestly, we should actually uh move 1:33:00this. Let's see if we could actually uh 1:33:02let's move this 70%. It's more like down 1:33:05here, right? If you're able to 1:33:07consistently not lose money 1:33:10and consistently break even, you are 1:33:13like 70% of the way there to being a 1:33:15profitable trader. All right? Because 1:33:17not losing money consistently is huge,1:33:21right? And that means you already have a 1:33:24pretty good risk management system,1:33:25right? We'll do RM, risk management 1:33:28system. It means you're able to limit 1:33:31losses, which is huge, right?1:33:34And you probably also have a pretty good 1:33:36trading management system. Trading 1:33:38management, right? So, this should be 1:33:42your mindset. Instead of going into the 1:33:44markets every day thinking about, oh, am 1:33:46I going to make money today? Am I going 1:33:48to be profitable? Is this the first day 1:33:50I'm going to make my first thousand 1:33:51dollar? Instead, focus on, okay, my goal 1:33:54today is to not lose money. by the end 1:33:57of the day I either should be at zero 1:33:59dollars on the day or maybe up five $10 1:34:02a small amount right and you should 1:34:05approach you should think about break 1:34:08even days as winning days especially if 1:34:12you're just starting out right so if 1:34:14you're breaking even consistently 1:34:17right I want you in your mind to 1:34:19consider that a win consider that a 1:34:21victory right and then if you have one 1:34:24whole week where you where you didn't 1:34:26lose any money where you broke even the 1:34:28entire week. That's that's a winning 1:34:30week. That's a good week because a lot 1:34:33of traders, that's especially as 1:34:36beginners, you're not going to be able 1:34:37to make money right away. It's just not 1:34:39that easy. It's not that simple. As a 1:34:41beginner trader, 3 weeks later, you're 1:34:43making money. It's just not it doesn't 1:34:44happen, right? But a lot of traders when 1:34:47they're just starting out because 1:34:49they're not immediately profitable,1:34:52they're like discouraged. they like 1:34:55almost don't want to trade anymore 1:34:57because they're not making money, right?1:34:59And they're and when they do break even,1:35:01let's say, they don't really think of it 1:35:04as anything good. They're just like,1:35:05"Oh, whatever. I didn't make money.1:35:07Today was a horrible day." And that 1:35:09alters their mindset, right? And 1:35:12instead, I want you guys to treat break 1:35:14even days in the beginning as profitable 1:35:17winning days. And if you're able to 1:35:20consistently break even, break even,1:35:22break even, right? There are there are 1:35:25probably just a few small fixes that you 1:35:28have to make in your trading to become 1:35:31consistently profitable. All right? And 1:35:33honestly, this is the way that I thought 1:35:35about it. And even when I was even if 1:35:37you're paper trading, even if you're 1:35:39paper trading, right, which is trading 1:35:40with fake money, you're not trading real 1:35:42money. It's like practice trading. I 1:35:45still want you to focus on breaking even 1:35:47every single day. Okay? You can 1:35:49experiment. You could try different 1:35:50strategies. Of course, if you're 1:35:52experimenting, and if that experiment 1:35:54doesn't work out, yeah, you're probably 1:35:55going to lose money. But over time, if 1:35:58you're continuing to paper trade, I 1:36:00still want you to focus on breaking even 1:36:02consistently. All right? And that's what 1:36:05I did. I paper traded for 3 to four 1:36:06months. I think in hindsight, that was a 1:36:09bit too long, but I can't really 1:36:11[clears throat] go back in time and 1:36:12change that. But even when I was paper 1:36:14trading, I considered every single break 1:36:17even day a winning day. I considered 1:36:20that a victory. I considered that 1:36:22progress and it gave me momentum. Me 1:36:25thinking about breaking even in that 1:36:28way, right? Actually, you know, gave me 1:36:31more motivation. It gave me more 1:36:34momentum to continue studying, continue 1:36:37improving. You know what I mean? And I 1:36:40think that's I think that could be 1:36:42really helpful for helpful for 1:36:44essentially any trader. All right. And I 1:36:47remember at some point I'm like, "Wow,1:36:48I've been breaking even for a few weeks 1:36:49now." And then boom, I had my first 1:36:51winning day. I had my first consecutive 1:36:54winning days. And then all of a sudden I 1:36:56had my first week where I I made money 1:36:58every single day or with paper trading 1:37:00of course, but and that gave me even 1:37:02more momentum. And then when I started 1:37:05trading uh with real money on my first 1:37:08day guys, I made $711 1:37:10which is insane. Um it completely 1:37:13changed my world. But it was because you 1:37:15know for 3 4 months I was paper trading.1:37:17I had the right mindset and I was 1:37:18focusing on consistently improving.1:37:21Okay. And of course I had my dad, right?1:37:24That's really, you know, the game 1:37:26changer. You really ideally need a 1:37:28mentor if you want to be able to succeed 1:37:30super quickly. All right, guys. Um, so 1:37:34yeah, hopefully this helps you guys 1:37:36focus on breaking even if you're a 1:37:38beginner trader. That will give you 1:37:39momentum to eventually become 1:37:41profitable. If you guys haven't started 1:37:43watching my free 8 plus hour course,1:37:45it's listed on my YouTube. It's also in 1:37:48the description of this video. You can 1:37:49hop into my free community. You can 1:37:51watch the course, interact with other 1:37:52students, interact with myself. I do 1:37:55free classes every single Thursday.1:37:57They're live and I teach you kind of the 1:38:00framework on how to make your first 1:38:01$10,000 with trading. Make sure you go 1:38:03to those classes every single Thursday.1:38:05Very, very important. And yeah, if 1:38:08you're looking to take this a little bit 1:38:10more seriously, you're maybe you went 1:38:12through all my free uh courses and all 1:38:14that and you want to trade live with me 1:38:16every day, you want me to take you under 1:38:18my wing and mentor you, shoot me a DM on 1:38:21Instagram. I'm going to list that below,1:38:22Emanuel Trades, and I can give you more 1:38:24information about my mentorship program.1:38:26All right, hopefully this video helps.1:38:28Hopefully this video kind of changed 1:38:30your perspective and hopefully gave you 1:38:32a lot of motivation, especially if you 1:38:34are someone who is a break even trader.1:38:37Uh, this should hopefully have 1:38:39definitely helped you. So, see you guys 1:38:40on the next video.1:38:44Welcome to the price action chapter of 1:38:46this free course. And in this chapter,1:38:48I'm going to teach you everything you 1:38:50need to know about reading and 1:38:52interpreting price action. And keep in 1:38:54mind, as traders, we only look at price 1:38:58action when it comes to making our 1:39:01decisions. We're not looking at 1:39:02financial documents. We're not reading 1:39:04the news. We're not reading income 1:39:06statements. We are solely focusing on 1:39:09reading price action. And I'm going to 1:39:11teach you how to read candlesticks. I'm 1:39:12going to teach you what indicators I 1:39:14use. I'm going to teach you how to read 1:39:15volume, how to read support and 1:39:17resistance, relative strength in the 1:39:19markets, and everything you need to know 1:39:20to be a price action professional. So,1:39:23make sure you pay attention and let's 1:39:25hop right into this chapter. What is 1:39:28going on, guys? Hope you guys are having 1:39:30a great day and I'm very excited that 1:39:33you're watching this video and that you 1:39:36have committed yourself towards learning 1:39:38this course. And today we are going to 1:39:40be talking about a very very crucial 1:39:43element of price action. And remember 1:39:46price action is the only thing we use to 1:39:50perform technical analysis and you know 1:39:53analysis for trading when when it comes 1:39:55to trading stocks or crypto. Okay, these 1:39:59are the very fundamentals that you have 1:40:02to innately understand if you want to 1:40:05succeed with trading. This is the meat 1:40:08and potatoes of trading. It's the 1:40:10absolute basics. So my recommendation is 1:40:14get out get out a notebook, grab a pen 1:40:16or a pencil and make sure you take some 1:40:18notes so you really can digest this 1:40:21information. You need to understand this 1:40:24to move forward with the course. Okay.1:40:27So I have the pres presentation ready to 1:40:29go. So grab the pencil, grab the 1:40:31notebook, and I'm going to turn off this 1:40:33camera real quick. Very good. And let's 1:40:37get started. So we are going to be 1:40:39talking about candlesticks. Okay. And 1:40:43why do we use candlesticks? And 1:40:45candlesticks are the bars that you guys 1:40:48see on all of the price charts that, you 1:40:51know, we're viewing in the community or 1:40:52that you may have seen in the past. And 1:40:55those bars are, you know, they're 1:40:56candlesticks. And I'm going to give you 1:40:58guys a little bit of history of the 1:40:59candlesticks, why we're using them, and 1:41:02what they mean. So, number one, we're 1:41:04using Japanese candlesticks. And they 1:41:06focus on the open and the close of a 1:41:10bar. Okay? And we have to remember 1:41:13that, you know, when we're looking at a 1:41:15candlestick that represents a time 1:41:17frame. So, we're looking at the open of 1:41:19that time frame and then the close of 1:41:21that time frame. It's going to make a 1:41:23little bit more sense in a second here.1:41:26So, Japanese candlesticks, what they 1:41:29present is they show a graphic 1:41:32representation of the supply in demand 1:41:35for each time period's price action. And 1:41:38we have to remember that's what a that's 1:41:41how a market operates. It operates off 1:41:43supply and demand. Supply meaning the 1:41:45sellers and demand meaning meaning the 1:41:48buyers. Okay? That's how a market 1:41:50functions. There has to be buyers and 1:41:52there has to be sellers. And obviously 1:41:55if there's more buyers than sellers then 1:41:57the price is going to go up and if 1:41:59there's more sellers than buyers the 1:42:00price is going to go down. This is how a 1:42:02market functions. Okay? and candlesticks 1:42:06they give us a representation of that 1:42:10you know supply and demand of those 1:42:12buyers versus the sellers. Okay? And 1:42:16maybe a lot of you guys have seen bar 1:42:18charts um and versus candlesticks but or 1:42:22maybe you guys have seen like hyenashi 1:42:24candlesticks. I always 100% recommend 1:42:28Japanese candlesticks which are just the 1:42:30regular candlesticks on Trading View or 1:42:32whatever platform that you guys are 1:42:34using. They're way more visual. They 1:42:37give you a very clear picture on the 1:42:39price action that's occurring. And like 1:42:42I said, they emphasize the relationship 1:42:44between supply and demand. Okay? If we 1:42:46understand the supply and demand of what 1:42:50we're looking at, of the stock or crypto 1:42:51that we're that we're looking at, then 1:42:53we could take advantage,1:42:55you know, of that supply and demand and 1:42:57make a profit. That's the whole point.1:43:00And that battle between the buyers and 1:43:03the sellers, right? This supply and 1:43:05demand element that I'm talking about,1:43:08it's the most important part of 1:43:09technical analysis. This is what makes 1:43:11technical analysis. That's why it's so 1:43:14crucial for you guys to really pay 1:43:15attention and understand how to read 1:43:18these candlesticks. So, how are they 1:43:20formed? Right? And depending on which 1:43:23time frame you're looking at, a 1:43:24candlestick represents the price action 1:43:27that occurred during that time. So, if 1:43:29we're looking at a five-minute chart,1:43:31right? Each candlestick on that chart 1:43:34represents five minutes worth of time,1:43:36right? So, for example, you know, we 1:43:39talked about kind of the open and close 1:43:41of the candlestick.1:43:43Let's say it's uh 10 10:00 a.m., right?1:43:47And a 5m minute candle started forming.1:43:49At 10:00 a.m. the candle obviously the 1:43:515minute candle started forming and then 1:43:54at 10:05 the candle stopped forming and 1:43:57then the next candle started forming at 1:43:5910:05 and then at 10 10 that one closed 1:44:02and then another one starts forming. So 1:44:03you can see that every candlestick u 1:44:06represents you know a unit of time and 1:44:09obviously on fi on 15-minute chart 1:44:11charts every candlestick represents 15 1:44:14minutes worth of time and on daily 1:44:15charts every candlestick represents one 1:44:17day worth of time. You guys get the idea 1:44:20and if you might if you're asking 1:44:22yourself why are we looking at different 1:44:24time frames? I'm going to be talking 1:44:26about that later in the course, but it's 1:44:28very important that we're looking at 1:44:30several time frames and reading the 1:44:32candlesticks that are on uh several 1:44:34different time frames. And we're going 1:44:36to get into that a little bit later in 1:44:37the course. So, let's start with the 1:44:40absolute basics on how to read 1:44:42candlesticks. Like I said before,1:44:44candlesticks emphasize the open and the 1:44:47close of a bar, right? So if it's a 1:44:50green candlestick, that means price went 1:44:53up in that time frame, right? In that 1:44:57candlestick's time frame. So if it's a 1:44:58five-minute chart, that means price went 1:45:00up in that 5 minutes. If it's a 1:45:0115-minute chart, price went up during 1:45:03those 15 minutes. Okay? So the bottom of 1:45:07the candle or the the the body of the 1:45:10candle, this is known as the body. The 1:45:13bottom of it is where price opened. The 1:45:16top of it is where price closed, right?1:45:18And these little lines here, you can 1:45:20call them wicks or tails. They represent 1:45:23the absolute lows during that time right 1:45:26here. And the upper wick represents the 1:45:29absolute highs of price during that 1:45:32candle uh during that candle's time.1:45:35Okay. So, if it's green, it obviously it 1:45:37it closed higher than it opened. So,1:45:39that's why the you know, this is where 1:45:41it's closing. This is where it's 1:45:42opening. And the wicks, like I said,1:45:43highs and lows. If it's a red candle,1:45:46that means it opened at a higher price 1:45:50than it closed, right? That means it 1:45:52went down during that time frame. So, it 1:45:54closed at a lower price than which it 1:45:56opened. These wicks, they represent the 1:45:59the same thing, the absolute highs of 1:46:01that candlestick and the absolute lows 1:46:04of the candlestick right here. Okay? So,1:46:05if it's red, it went up. I'm sorry. If 1:46:07it's if it's red, it went down. If it's 1:46:09green, it went up. Okay?1:46:11And the one question we always have to 1:46:14be asking ourselves here is who won the 1:46:17battle, the buyers or the sellers. Okay,1:46:21so let's look at this diagram to have a 1:46:23better understanding of what different 1:46:27candlesticks mean and how you know 1:46:29different candlesticks can form. So 1:46:33first and foremost we have uh this is 1:46:35called a wide range bar. And this is one 1:46:38example where the candle opened at this 1:46:40price and closed at the absolute highs 1:46:44up here. Have you guys see there's no 1:46:47tails, right? There's no wicks. Meaning 1:46:50it opened at the absolute lows and it 1:46:53closed at the absolute highs. That's why 1:46:55we don't have any tails. This is a very 1:46:57bullish candle. Remember bullish means 1:46:59indicative of strength. meaning there's 1:47:01a lot of buyers. So, this is a, you 1:47:04know, a buyerheavy or buyer dominant 1:47:07candlestick.1:47:09If you look at this one, we have here 1:47:11what's called a topping tail. Okay? And 1:47:14we're going to talk about how topping 1:47:15tails are formed during the next slides,1:47:18but let's let's try to understand how a 1:47:20topping tail is formed here. So, we open 1:47:24at the absolute lows. We rally all the 1:47:27way up here to form a high. And then the 1:47:30sellers come in and they bring bring it 1:47:34all the way back down to close here.1:47:36Right? So we opened here. We went all 1:47:38the way up. Then we dropped and and 1:47:41closed here. So open here, closed here.1:47:45So you know this is a green bar, right?1:47:49A lot of you guys might be thinking, oh,1:47:50it's green. That must mean it's bullish.1:47:52It must means it's a buyerheavy candle,1:47:55right? Buyer dominant candle. But in 1:47:58reality, what happened here is we opened 1:48:00here, we got bought, and then the 1:48:03sellers came in, right? And they brought 1:48:07the stock or crypto all the way back 1:48:09down to close here. So although it's 1:48:10green, right, it's a very sellerheavy 1:48:14candle, right? So this is a topping 1:48:16tail. So if we go here, topping tail,1:48:18it's a clue that the sellers have taken 1:48:20control, right? Cuz the buyers brought 1:48:23it up to here and then the sellers are 1:48:25bringing it all the way back down. and 1:48:26the sellers have taken control. If we 1:48:29look at this candlestick,1:48:32[cough]1:48:33excuse me, you could see that the tail 1:48:37is actually on the bottom. So, this is a 1:48:40excuse me, guys. So, this is a bottoming 1:48:42tail and bottoming tails are a clue that 1:48:45the buyers have taken control, right?1:48:48cuz we opened at this price. The sellers 1:48:52sold it and brought it all the way down 1:48:55to here just for the buyers to come back 1:48:58here and bring it all the way back up.1:49:00Right? So, the sellers tried to bring it 1:49:03down, but then the buyers brought it 1:49:06right back up to finish at the highs.1:49:09Okay? And then right here, we have a 1:49:11dogee bar, right? where it's kind of um 1:49:14the battle between the buyers and 1:49:16sellers are even, right? Because it 1:49:19opened here, it went all the way up,1:49:21then it went all the way down, and then 1:49:23it finished here. So,1:49:26a dogee bar shows kind of uh uh a battle 1:49:30between the buyers and the sellers and a 1:49:32battle that nobody really won. They kind 1:49:34of finished even. Okay. Same thing with 1:49:38this bar. Obviously, the buyers won a 1:49:40little bit, but it's mostly it's kind of 1:49:41like a, you know, the sellers and buyers 1:49:44were very even. So, what I want you guys 1:49:46to ask yourself is looking at this 1:49:48candlestick, right? We know that it 1:49:50opened here and closed here. In this 1:49:52case, it opened here, dropped, and then 1:49:54closed here. So, I want you guys to ask 1:49:58yourself and maybe even pause the video,1:50:00which candlestick out of this one and 1:50:02out of this one is more bullish. which 1:50:05one is uh more indicative of strength?1:50:08So, pause the video, think about it, and 1:50:12uh come up with an answer, and I'll go 1:50:14over it just in a second here. I'll give 1:50:16you guys a chance to pause it.1:50:20Okay, very good. If you guys chose this 1:50:23one, then you would be correct. This one 1:50:25is a stronger candle than this one. And 1:50:28the reason is is for this one, right? It 1:50:30opened here. The sellers came in and 1:50:33then the buyers, you know, them were 1:50:35like, "Hold on, you know, you can't 1:50:37bring this any lower." And they brought 1:50:38it all the way back up. You can think of 1:50:40this bar is battle tested, right? The 1:50:42sellers actually showed up, but the 1:50:45buying pressure was so strong that it 1:50:47negated all the sellers and it brought 1:50:50the stock all the way back up to make 1:50:51new highs. In this case, we opened here 1:50:54and we sold here, right? We opened here 1:50:58and we closed here. We don't know if 1:51:00there were that many sellers during this 1:51:02bar. Maybe the sellers were sleeping.1:51:03They weren't there, right? This bar is 1:51:06actually battle tested, right? We had 1:51:08sellers shown up, but they were 1:51:10irrelevant. Here, we just kind of closed 1:51:12at the highs after opening at the lows.1:51:14So, this one is way more bullish.1:51:18Something to something to, you know, the 1:51:20buyers have really taken control. It's 1:51:21very buyerheavy.1:51:24Looking at the red candlesticks, guys,1:51:26it's the absolute same idea. We open 1:51:28here and then we close all the way at 1:51:31the bottom. There's no tails, meaning we 1:51:34open at the absolute um you know, we 1:51:37opened at the absolute highs, we closed 1:51:38at the absolute lows. Okay, if we have a 1:51:41topping tail here, what happened was we 1:51:44opened at this price, the buyers showed 1:51:47up, they brought it all the way up here,1:51:48and then the sellers came in and brought 1:51:50it all the way back down. So, a topping 1:51:53tail, guys, is a clue. The sellers have 1:51:55taken control. So, the sellers have 1:51:57really taken control. There's a lot of 1:51:59selling pressure during this topping 1:52:01tail here. It's kind of the same thing.1:52:04It's a dogee bar. The buyers and sellers 1:52:05are mostly even, right? There's there 1:52:08was a battle, but nobody really won the 1:52:10battle, right? In this case, what we 1:52:12have here is we opened 1:52:16we opened [snorts] at this price. We 1:52:18dropped all the way back down and the 1:52:20buyers came up. you know, they bought it 1:52:22down here. They brought it all the way 1:52:24back up and we still closed under the 1:52:27open, right? So, that's why it's still a 1:52:30red bar, but since the bottoming tail,1:52:33guys, it's a clue that the buyers have 1:52:34been taking control. So, even though 1:52:36this is a red bar, it's still a kind of 1:52:38a bullish bar. And although this is a 1:52:41green bar, it's still a kind of a 1:52:44bearish bar because we know that a 1:52:45topping tail is where sellers take 1:52:47control. A bottoming tail is where 1:52:49buyers take control. Hopefully that 1:52:50makes sense guys and let's kind of uh go 1:52:53into how they're actually formed right 1:52:56so if we have a fivem minute candle and 1:52:58and this diagram really shows that 1:53:02the importance of looking at different 1:53:04time frames because 1:53:06candles can form in different ways right 1:53:09this five-minute candle is the same is 1:53:12as this five-minute candle but they were 1:53:15they formed completely differently right 1:53:18here you know it's the All right, we 1:53:20have five one minute candles make up a 1:53:22five-minute bar. And here five minute or 1:53:25five one minute candles make up this 1:53:27five-minute bar. But in this scenario,1:53:30we have, you know, we have five candles 1:53:32that are going straight up, right? One 1:53:35after another, right?1:53:38While here we have a big rally and then 1:53:41kind of, you know, consolidation up 1:53:42here. Meaning the candles, they're just 1:53:44staying at the highs of this 1:53:45candlestick, right? They're just staying 1:53:47here at the highs. So this just this 1:53:49kind of um proves the point that 1:53:52candlesticks form in different ways and 1:53:54that's why it's important to look at 1:53:56different time frames because 1:53:59these two setups are different, right?1:54:02This has different implications than 1:54:03this does. Okay? And we're going to be 1:54:05talking about that later in the course.1:54:06But I just want to stress the importance 1:54:08now of looking at different time frames 1:54:11because if you know the candlesticks 1:54:14have formed in different ways that's 1:54:15going to give you information of what it 1:54:17might do next. Okay. So that's really 1:54:21what I want to emphasize. They could 1:54:22form in different ways and that's 1:54:24important. So if we look at for example 1:54:26a 15-minute candle, this is another 1:54:29example of how they're formed. Right 1:54:31here we have three fiveminute candles.1:54:34Here we have three fiveminute candles.1:54:35You could see this one's a little 1:54:37different. It's kind of a uh you know,1:54:39we have a rally and then we we just 1:54:42continue higher. Where here it's again 1:54:44rally and then we just stay at the 1:54:45highs. We don't really you know continue 1:54:48higher. So they're formed in different 1:54:49ways. Okay. And you'll see later on once 1:54:53we actually start talking about 1:54:54different strategies,1:54:56you'll start to really understand the 1:54:58importance of how the candlesticks are 1:55:00forming and and the patterns that 1:55:02they're setting up in and how they look 1:55:04on the charts on different time frames.1:55:06Okay? But I don't want to overwhelm you 1:55:08with all that information. Now, for now,1:55:10just understand that different 1:55:13candlesticks form in different ways when 1:55:16you look at, you know, the smaller time 1:55:17frames or the larger time frames. Okay?1:55:19So, that's what's important. So let's 1:55:22understand how bottoming tails are 1:55:23formed. So like I said, we open at this 1:55:26price, right? This is where we're 1:55:28opening and we drop. So right, so this 1:55:30is a larger time frame and by looking at 1:55:33the smaller time frames, we see more 1:55:35candlesticks. We see exactly how this 1:55:38candlestick was formed 1:55:40and what went into it.1:55:43So we open at this price.1:55:47Excuse me, guys. I'm just going to grab 1:55:48a sip of water.1:55:53>> [clears throat]1:55:54>> Sorry guys. So, we open at this price.1:55:57We drop all the way down to make 1:55:59absolute lows. And then the buyers show 1:56:02up and they bring it all the way back up 1:56:05to make new highs. So, this is a 1:56:07bottoming tail, guys. Remember, a 1:56:08bottoming tail. It's a clue. The buyers 1:56:11have taken control. And this it kind of 1:56:13makes sense, right? The sellers came in,1:56:15but then the buyers dominated. that 1:56:17brought it all the way back up to make 1:56:18new highs. So the these are this is kind 1:56:21of how this gives you insight on how a 1:56:23bottoming tail is formed. And at the end 1:56:25of the day, we see that the buyers have 1:56:27taken control.1:56:29Even if it's a red bottoming tail,1:56:31right, we have a a green one here. Even 1:56:33if it's red, you could still see that 1:56:36the buyers have taken control even 1:56:38though, you know, it still uh closed at 1:56:43a lower price than it opened. So, we 1:56:46opened here. We dropped all the way back 1:56:48down to make absolute lows. And then the 1:56:50buyers take control and they bring it 1:56:52almost back up to the highs, but you 1:56:54know, not quite. So, you could still see 1:56:56that the buyers have ended the move. The 1:56:59buyers have taken control. If we look at 1:57:02a topping tail, we open at this price.1:57:06We rally, the buyers come in, they it 1:57:08rallies, we make absolute highs, and 1:57:10then the sellers come in, they dominate,1:57:13and they bring it all the way back down 1:57:14to make new lows, and we close at a 1:57:17lower price than where we opened. That's 1:57:19why it's red. And we could see that the 1:57:22sellers have taken control. So remember,1:57:23a topping tail, very important, topping 1:57:26tail is when the sellers have taken 1:57:28control. Okay,1:57:31another example. Even when it's green,1:57:33we open at this price. Buyers come in,1:57:36they rally, we make absolute highs just 1:57:38for the sellers to show up and they end 1:57:40the move. And although it's green, we 1:57:42could still see that the sellers have 1:57:44taken control. Okay,1:57:47with a dogee bar, we we talked about how 1:57:50dogei bar represents a battle that 1:57:52neither the buyers or the sellers won.1:57:54And in certain circumstances, the dogee 1:57:57bar is a very effective reversal and 1:58:00entry bar. So, that's really important.1:58:02They a dogee bar is is an excellent 1:58:05entry bar and we're going to be talking 1:58:07about that a little later once we 1:58:08actually start going through uh through 1:58:10the strategies. Okay, so that's that's 1:58:13the end of this beginner candlestick 1:58:15class. And if you guys are a little bit 1:58:17confused on what these candlesticks 1:58:20actually mean, how to read them in 1:58:21sequences or, you know, actually 1:58:24applying this information, just stay 1:58:26tuned. It's all going to make sense as 1:58:28the course progresses. But please just 1:58:31make sure that you understand what a 1:58:32dogee bar means. You know how topping 1:58:35tail what topping tails mean, what 1:58:38bottoming tails mean, right? Um and just 1:58:41understanding that candlesticks form in 1:58:44different ways and looking at how a 1:58:47candlestick forms gives us a lot more 1:58:49insight on what's going on uh with that 1:58:52stock or with that crypto. But we're 1:58:54going to be talking and going more into 1:58:56detail as the course progresses. Just 1:58:58make sure you understand everything we 1:59:00talked about today. Okay, guys. Uh, let 1:59:03me put my camera up one more time. So, I 1:59:07would suggest also re-watching this 1:59:09video if you don't understand it 1:59:10completely. Guys, let me know if you 1:59:12have any questions and looking forward 1:59:14to seeing you guys in the next section 1:59:17of the course. Thank you guys. What is 1:59:21going on guys? Hope you're having a 1:59:22great day. During the last class, we 1:59:25talked about the basics of candlesticks 1:59:27and we learned some of the fundamentals 1:59:29of what candlesticks are, why we're 1:59:32looking at them, and what they really 1:59:33signify. And just for a reminder, they 1:59:36signify and they show the relationship 1:59:39between uh supply and demand, between 1:59:43the buyers and the sellers. And if we 1:59:45can understand the relationship between 1:59:47the buyers and the uh and the sellers 1:59:49and the candlesticks and we could see 1:59:51the patterns and the way that they form 1:59:53and understand what that means, we could 1:59:56take advantage of it and find, you know,1:59:59hopefully super lucrative trades. So dur 2:00:02during this class, we're going to be 2:00:04going to uh going into the advanced 2:00:06candlestick course. So, I'm going to 2:00:08share with you guys some additional 2:00:10details and some other types of 2:00:12candlesticks that are that are important 2:00:14to uh recognize. Okay. My recommendation 2:00:18is if you haven't watched the previous 2:00:20course, if you're still kind of uh 2:00:21confused on topping tails, bottoming 2:00:24tails, what candlesticks are, how they,2:00:26you know, uh show different time frames,2:00:28then definitely take a step back, maybe 2:00:32reach out to me, ask me some questions 2:00:33before you go into the advanced course.2:00:35Okay. So I'm going to turn off my 2:00:38camera. Perfect. And let us begin here.2:00:41So this is the advanced candlesticks 2:00:43course. Let's get right into it. So for 2:00:45mastering candlesticks, we have to 2:00:46really understand that some candlesticks 2:00:48are more important than others. And they 2:00:51give us uh different types of 2:00:53information that we could use to base 2:00:56off of when we go into trades. And there 2:00:59are very specific candlesticks that we 2:01:01are looking for when we time our entries 2:01:04into stocks or crypto, right? And later 2:01:08in the course when we actually talk 2:01:09about different strategies and different 2:01:12ways uh the candlesticks, you know, the 2:01:14different patterns that they could form,2:01:16um it's going to make a lot more sense 2:01:19and you're going to really see why we 2:01:22look for specific candlesticks in 2:01:24certain situations. And there are also 2:01:26specific candlesticks that we look for 2:01:28when finding reversals. And there are 2:01:31also specific candlesticks that can 2:01:32enhance trading strategies and increase 2:01:35the odds of success for a trade. So 2:01:39something that we need to emphasize is 2:01:41the way the candlesticks form. Number 2:01:44one, they give you different information 2:01:46about what's happening in the trade. And 2:01:47they also make trades a lot more potent 2:01:50where if you find a specific pattern or 2:01:52a specific strategy,2:01:54you know, having some specific type of 2:01:58candlestick that we're looking for can 2:01:59greatly increase the odds of that 2:02:01strategy working and you actually making 2:02:03money. So, that's why it's important to 2:02:05pay attention here and master the 2:02:08candlesticks that we're about uh to 2:02:09learn about. So as a reminder, topping 2:02:13and bottoming tails, really important 2:02:14that you guys know this. Topping tails 2:02:16right right here. Tail at the top 2:02:18suggests that the sellers have taken 2:02:20control, right? The sellers have taken 2:02:23control for both, you know, the green 2:02:25and the red bar. For bottoming tails,2:02:28it's the opposite. It suggests that the 2:02:30buyers have taken control. Really 2:02:32important that you guys that as soon as 2:02:34you guys see these sort of candlesticks,2:02:37you know exactly what they mean. And 2:02:40these bars are are going to provide you 2:02:42lots of insight on the price action 2:02:44that's occurring with stocks or crypto.2:02:46Okay? And it's really useful when we 2:02:49pair these sort of candlesticks with 2:02:51with the strategies that we're going to 2:02:52be learning. It's all about pairing 2:02:55things together to create a more potent 2:02:58trading setup. Okay. So now let's go 2:03:02into narrow range bars. and a narrow 2:03:06range bar. They are bars that have a 2:03:08small distance between the high and the 2:03:11low of that candlestick, meaning there 2:03:13really isn't all that much price action 2:03:16that's happening, right? There's not,2:03:19we're going to see an example in a 2:03:20second here. It's going to make a little 2:03:21bit more sense. Um, they are pretty 2:03:23significant when they occur after a 2:03:25multiar move because, you know, they 2:03:28might serve actually as a reversal 2:03:31candlestick. It gives you uh kind of 2:03:33more [snorts] evidence that a reversal 2:03:35might take place, right? And they're 2:03:38also especially useful uh useful for buy 2:03:40setups, one two three patterns, and 2:03:43reversal setups. And we are going to 2:03:46cover that when we actually start with 2:03:48the strategy section of the course. So 2:03:50let's let's look at what they are. Here 2:03:52we have normal ranged bars, right? You 2:03:55see a big bar like this opened at this 2:03:58price, right? dropped to these lows,2:04:01went all the way up to these highs, and 2:04:03closed here. Same thing with this. These 2:04:05are kind of normal range bars. These are 2:04:07what narrow range bars look like.2:04:09Whoops. You could see that there's not 2:04:11that much distance between the open and 2:04:13the close, right? The open and the 2:04:15close. They're kind of smaller 2:04:17candlesticks, right? So, these are what 2:04:19they look like. So, if you see a bar 2:04:22candle like this, just know it's a 2:04:24narrow range bar. Okay? Okay, make sure 2:04:25you you're able to identify that wide 2:04:28range igniting bars. Okay, this is also 2:04:31really important to be able to recognize 2:04:34a bullish wide range igniting bar is an 2:04:37above average size bar that has its open 2:04:40price near the lows of that time period 2:04:43and its close price near the highs of 2:04:45that time period. And it suggests that 2:04:48it's very bullish and that many traders 2:04:50are playing long. And we actually uh saw 2:04:54what this looks like during the beginner 2:04:56uh course. However, I'm going to show 2:04:58you guys another example in a second. A 2:05:00bearish a bearish wide range igniting 2:05:03bar is an above average size bar that 2:05:06has its open price near the highs of 2:05:08that time period and its close price 2:05:10near the lows of that time period.2:05:12Suggest many player uh many traders are 2:05:14playing short.2:05:16So, this is a great example of what they 2:05:18look like. Just give me one second. I'm 2:05:20going to have a sip of water. for one 2:05:21side.2:05:24[snorts]2:05:25So why are they bullish wide r or 2:05:29bullish or bearish wide range igniting 2:05:31bars? Because here the open is near the 2:05:35lows, right? And the close is near the 2:05:39overall highs, right? We don't have a 2:05:41large bottoming tail. We don't have a 2:05:43large topping tail. Same thing here. We 2:05:45opened near the highs. We closed near 2:05:48the lows.2:05:50And these bars show you that there is um 2:05:54a new move that's being ignited,2:05:58especially when it's coming from a 2:05:59consolidation. And we're going to I'm 2:06:02going to show you guys examples of that 2:06:03later. Okay? But the whole point what 2:06:05you just make sure you recognize that 2:06:08these are igniting bars, okay? They're 2:06:11bullish or bearish wide range igniting 2:06:13bars. Make sure you're able to spot one.2:06:17Okay? And that's really all we're going 2:06:19to talk about. So, for this class, if 2:06:22you're still a little confused on how 2:06:25we're going to use these candlesticks,2:06:26don't worry. We're going to address 2:06:27that. The whole point of these two 2:06:29candlestick lessons is to, you know,2:06:32make sure that you guys familiarize 2:06:34yourself with with, you know,2:06:37identifying, you know, for example, wide 2:06:38range igniting bars, narrow range bars,2:06:42uh, bottoming tails, topping tails. You 2:06:44should know when you see a candlestick 2:06:48um that's for example a topping tail,2:06:49you should be able to immediately say,2:06:51"Hey, that's a topping tail. I know what 2:06:52I'm looking at." Or if you see a narrow 2:06:54range bar, uh it's important to look at 2:06:57that and be like, "Okay, that's you 2:06:59know, identify it for what it is."2:07:01Right? So, once you understand all of 2:07:04these candlesticks, uh how candlesticks 2:07:07show you different time frames, right?2:07:09What's the point of them, you're going 2:07:10to be able to move on to the next 2:07:12section. Okay guys, so hopefully this 2:07:15makes sense. Please reach out to me if 2:07:16you have any questions. And if you're uh 2:07:20you know, if you understand everything 2:07:22we've done so far with the candlesticks,2:07:23you're finding it easy, then that's 2:07:26great because you already just learned a 2:07:28crucial part of price action, a crucial 2:07:31part of reading technical analysis, and 2:07:34you're well on your way uh to finding 2:07:36trades, understanding what the 2:07:39candlesticks are doing to certain 2:07:41patterns. And it's going to make a lot 2:07:43more sense once we go over the strategy 2:07:45section. But proud of you guys for uh 2:07:48sticking with it so far and I'll see you 2:07:50in the next class. Thank you. What's 2:07:53going on guys? Hope you're having a 2:07:55great day. For today's class, we are 2:07:57going to be talking about the three 2:08:00different trends that exist in trading 2:08:03and with price action. Okay. So these 2:08:07are super basic trends that you guys 2:08:10should know how to identify and you know 2:08:14you should know the implications of 2:08:16these trends as well. So let's get right 2:08:18into it. The three different trends.2:08:21This is probably stuff that uh you've 2:08:23heard of you've heard of already. So 2:08:26when we're looking at an uptrend, it's 2:08:28characterized by two different 2:08:31characteristics. number one, higher 2:08:34highs and higher lows, and number two, a 2:08:38rising 20-day moving average. So, we 2:08:41haven't covered how to use the 20-day 2:08:43moving average, but just always keep in 2:08:46mind that we want a rising 2:08:50and a trending higher 20-day moving 2:08:52average. Okay, so as you can see, we 2:08:56have higher highs, right? We're making 2:08:58new highs 2:09:00and we're making higher lows, right?2:09:03This low is higher than that low. This 2:09:05low is higher than that low. Same with 2:09:07the highs. Okay? And as you can see,2:09:10this line, the black line, which is the 2:09:1320-day moving average, it's under price 2:09:16and it's also uh trending higher. And 2:09:20we're going to be doing the 20-day 2:09:22moving average class next. So, just stay 2:09:25tuned for that. Okay, so this is what an 2:09:28uptrend is. Very simple stuff. We're 2:09:31looking at a downtrend. It's 2:09:32characterized by number one, lower highs 2:09:36and lower lows, okay? We have lower 2:09:39highs,2:09:41right? And lower lows. So low here, low 2:09:45here, lower here. And as you can see, we 2:09:48have a declining 20-day moving average,2:09:51which is this line. So, as you can see,2:09:52during a downtrend, we want the 20-day 2:09:55moving average to be over price, right?2:09:58And we see that 2:10:00during the downtrend, it sort of 2:10:02retraces, right? During the it always 2:10:04rallies right to the 20-day moving 2:10:06average, drops, rallies right to the 2:10:0820-day moving average, drops, but we're 2:10:09going to be looking at the 20 MA uh 2:10:12during the next class. So, this is what 2:10:14a downtrend looks like. Lower lows,2:10:16lower highs. Okay?2:10:19And we also have a sideways trend which 2:10:21is characterized by relatively equal 2:10:24highs and lows. Right? We rally, we make 2:10:27a high, we drop right to the previous 2:10:31low, we rally to the previous highs,2:10:33drop to the previous low. Okay? And once 2:10:37we talk about support and resistance,2:10:40this is going to make a lot more sense.2:10:42But this is what a sideways trend is. So 2:10:45sideways trend it's not you know we 2:10:49don't have u one particular bias we 2:10:51don't have a bullish bias or a bearish 2:10:53bias right overall we're just sort of 2:10:56fluctuating between the highs and the 2:10:59lows okay so this is what a sideways 2:11:01trend is um and usually sideways trends 2:11:05they uh lack momentum right so with uh 2:11:10uptrends and downtrends we clearly know 2:11:12what the what the momentum is right For 2:11:14an uptrend, there's clearly bullish 2:11:16momentum, right? We're we're rising.2:11:18There's a lot of buyers, right? Over 2:11:21with a downtrend, there's a lot of 2:11:22bearish momentum. There are a lot more 2:11:23sellers. You know, the sellers are 2:11:25dominating the move. But with a sideways 2:11:28trend, it's it's really there's no clear 2:11:30momentum. We we don't know exactly are 2:11:32the buyers winning or are the sellers 2:11:34winning just because, you know, we're 2:11:36kind of fluctuating between the highs 2:11:38and the lows. Okay, here's an example of 2:11:40a 2:11:42of a uptrend. This is a real chart with 2:11:44candlesticks as you can see right. We 2:11:47can see that we made a high here. We 2:11:49made a low here. This low was higher 2:11:52than this low. This high was higher than 2:11:54that high. Right here also make a higher 2:11:58high. Higher low. And as we continue 2:12:00going up, you can see that we're 2:12:02continuously making higher highs and 2:12:05higher lows. This blue line is the 2:12:0720-day moving average. Okay. And as you 2:12:11can see, there's probably a ton of 2:12:13candlesticks that you're already able to 2:12:15identify, whether it's a topping tail,2:12:18bottoming tail, narrow range bar, wide 2:12:19range, igniting bar, which is really 2:12:22good, or dogey bar as well. So, if 2:12:24you're already looking at these 2:12:25candlesticks and you're able to identify 2:12:27the different ones that we've learned 2:12:28about, that's fantastic. Looking at a 2:12:30downtrend, or actually, this is a 2:12:32perfect example of an uh of an uptrend 2:12:35uh and that that's followed by a 2:12:38downtrend, right? We could see here this 2:12:40white line is the two uh is the 20-day 2:12:42moving average. We could see we're 2:12:44making higher highs, higher lows until 2:12:49we actually reverse. And now we make 2:12:52lower highs and lower lows. Right? So 2:12:55we're uptrending, then we go into a 2:12:57downtrend. And this is actually 2:12:59screenshot of the NASDAQ ETF, the QQQ.2:13:04Um so this is this is a very recent 2:13:06snapshot. So you could see that we went 2:13:08from an uptrend to a downtrend, right?2:13:10Uptrend is higher highs, higher lows.2:13:12Downtrend is lower lows, lower highs.2:13:15Okay, hopefully that makes sense. So 2:13:18just make sure you're able to identify 2:13:21whether an uptrend or a downtrend or a 2:13:23sideways trend is occurring. Okay, guys.2:13:27And during the next class, we're going 2:13:29to be talking about the 20-day moving 2:13:31average, which is this white line. And 2:13:34I'm really excited to talk about that.2:13:36It's uh extremely important and 2:13:39hopefully this all makes sense guys. And 2:13:41uh so now you guys should be pretty 2:13:43familiar with identifying several 2:13:46different types of candlesticks and also 2:13:48identifi identifying different types of 2:13:51trends that are occurring as well. All 2:13:53right guys, have a good day. See you in 2:13:55the next class. Bye. So I made $1,163 2:14:00yesterday using all of the concepts that 2:14:02I'm going to teach you in this video.2:14:05So, I highly recommend watching until 2:14:08the end of the video because this can 2:14:09truly be transformative for your 2:14:12trading. This is my think or swim 2:14:15screenshot on my phone. So, it shows you 2:14:18all of my winning positions. It also 2:14:20shows you all of my losing positions.2:14:22And this is my Think or Swim screenshot 2:14:24on my desktop. As you can see, May 9th,2:14:263:53 p.m., $11,163.2:14:30And I've had a lot of people that have 2:14:31commented under my videos, hey, why 2:14:34don't you show your profits and your 2:14:36results on your actual brokerage account 2:14:39on your Schwab. So, I listened and here 2:14:41they are. Yesterday, May 9th, I made 2:14:44$10,831.2:14:46The reason for the small discrepancy,2:14:48it's around a $300 dis uh difference, is 2:14:50because Schwab takes off exchange fees 2:14:54um at the end of the trading day. So,2:14:56this is my profits after fees. So, this 2:14:59is for yesterday, May 9th. May 8th,2:15:022025, I made $4,98.2:15:05May 7th, uh, Wednesday, I made $5,44.2:15:08May 6th, that was on Tuesday of this 2:15:10week, I made $4,800.2:15:12And May 5th, Monday, I made $2,879.2:15:17So, if you do the math, it adds up to 2:15:20around $27,500 2:15:22in profit for me this past week. And the 2:15:25reason I'm showing you this isn't to 2:15:26boast. It's not to brag, but it's to 2:15:28show you that I actually do this for a 2:15:30living. Everything that I'm going to be 2:15:32teaching you in this video, I personally 2:15:35do to make money in the markets. And 2:15:37there are way too many trading educators 2:15:39that try to teach you how to trade, but 2:15:41they don't actually trade themselves. I 2:15:43want to be as transparent and as real as 2:15:46possible. So, now that you know that 2:15:47this actually makes me money almost 2:15:50every single day, let's go ahead and hop 2:15:52right into the video. To preface this 2:15:54video, what I'm about to show you isn't 2:15:56revolutionary. It's not brand new. It's 2:15:59literally existed forever, but it is 2:16:01unbelievably powerful if you know how to 2:16:04apply it correctly. And the best part is 2:16:06it is extremely simple to use. And in 2:16:09this video, I'm going to show you how I 2:16:11practically use this tool. I'm going to 2:16:14show you trades that I took this week 2:16:16and how I was able to use this tool to 2:16:19my advantage and make $27,000 this past 2:16:22week. And this mystery tool is the 20 2:16:26period simple moving average. And I 2:16:28guarantee there are people that are 2:16:29watching this video that are thinking to 2:16:31themselves, simple moving average, what?2:16:34Like I thought he would be using MACD or 2:16:36RSI or Ballinger bands or VWAP or 2:16:39stochastics or Elliot wave theory, all 2:16:41these complicated indicators. And no, I 2:16:44do not. The only tools that I use are 2:16:48the 20 SMA, the 200 SMA, 200 period 2:16:52simple moving average and volume, but 2:16:55mainly it's the 20 period simple moving 2:16:58average. I like to keep my trading 2:17:00simple. Trading is already hard enough 2:17:03given the fact that it's so 2:17:04psychologically and emotionally 2:17:06demanding. Like you have to be really 2:17:08disciplined to be a good trader. That's 2:17:10already hard enough. Why would I want to 2:17:12over complicate my trading using crazy 2:17:15complex indicators uh you know super 2:17:18cluttered charts looking at four or five 2:17:20different things to analyze a stock? No,2:17:22I don't want to do that. I like to keep 2:17:24it as simple as possible and that's why 2:17:26I use the 20 MA, right? It's because of 2:17:28the simplicity, but it is so powerful if 2:17:31you know how to use it, which I'm going 2:17:32to show you in this video. And what is 2:17:35the simple uh moving average, the 20 MA?2:17:38It essentially tracks roughly the last 2:17:40one month of trading data data and it 2:17:42represents that price action in a line.2:17:45That is all it is. It is a line that 2:17:48helps us trade. There are other moving 2:17:50averages like the 10 MA, the 50 MA, the 2:17:54100 MA, the 200 MA. And I really like 2:17:57the 20 because it's not too reactive 2:18:00like the 10 MA. Like if you get violent 2:18:02swings in price, the 10 MA is going to 2:18:04react super crazy. but it's also not too 2:18:07slow like the 50 MA or the 100 MA. It's 2:18:10like that perfect uh sweet spot where it 2:18:13represents the last one month of trading 2:18:15data. Now, I also use the 200 period 2:18:18simple moving average mostly for support 2:18:20and resistance and that is kind of like 2:18:22my long-term moving average. So, I like 2:18:25to use the 20 SMA for my medium-term and 2:18:28200 MA for my long-term moving average.2:18:30And the reason I use the 20 MA is 2:18:33because it is the ultimate trend 2:18:36following tool in existence. And a lot 2:18:39of people ask me why does it work? Like 2:18:41a lot of my students when they learn how 2:18:43to use it, they apply it in their 2:18:44trading, they would ask me why does this 2:18:46actually work? Like what's the reasoning 2:18:48behind it? And I've wondered this as 2:18:49well. And I honestly think it's because 2:18:51it's like a self-fulfilling magnet.2:18:53There are so many traders, institutions,2:18:57algorithms that use it that price just 2:19:00respects it in an unbelievable way that 2:19:03you're about to see. And you know, at 2:19:06the end of the day, I'm not sure exactly 2:19:08why it works, but it works. And that's 2:19:11the only thing that I really need to 2:19:13worry about. So, let's hop into how to 2:19:16actually use it. Number one, the main 2:19:19point here is the 20 MA is not effective 2:19:24when prices are sideways. It is only 2:19:28effective when prices are in a strong 2:19:31uptrend or downtrend or there's strong 2:19:34momentum in one direction. We don't ever 2:19:37want to see a flat 20 MA. A flat 20 MA 2:19:42isn't really useful. It's not effective 2:19:45for our trading. What we want to see is 2:19:47a rising 20 MA if it's an uptrend and we 2:19:52want to see a declining 20 MA if it's a 2:19:56downtrend. All right, so like I said,2:19:58this is the ultimate trend following 2:20:01tool in existence. And trends, whether 2:20:04that's an uptrend or a downtrend,2:20:06respect the 20 MA in this fashion where 2:20:09you have the 20 SMA, it's under price,2:20:13trending higher. All right? Right. And 2:20:15if you ever if you've ever been to one 2:20:16of my free classes, you've heard kind of 2:20:19like the jingle, the song that I use.2:20:21Under price, trending higher, under 2:20:23price, trending higher, under price,2:20:25trending higher. I literally want you to 2:20:26sing it to yourself so you can like 2:20:28cement it in your head. We want the 2:20:30moving average to be under price,2:20:33trending higher during an uptrend. And 2:20:36the opposite applies during a downtrend.2:20:38We want it to be overpric 2:20:41trending lower. Over price, trending 2:20:43lower. if it's in a downtrend in this 2:20:45way, right? Rising 20 MA and we have an 2:20:48uptrend. And what you're going to see is 2:20:51that within that trend, prices respect 2:20:54the 20 MA. They trade off of it where 2:20:56you could have a pullback into that 2:20:58rising 20 MA, right? You could also have 2:21:00a consolidation 2:21:02into that 20 MA. And the same thing 2:21:05applies if it's a downtrend. All right?2:21:08So, we get a move lower [snorts] um and 2:21:11then we retrace into the declining 20 2:21:12MA. move lower, retrace into the 2:21:15declining 20 MA. That's what you really 2:21:17need to understand. Let's go ahead and 2:21:19look at some examples. So, step number 2:21:21one, we have an established downtrend,2:21:24and that's extremely important. We have 2:21:27lower highs, lower lows. Now, number 2:21:30two, what is the moving average doing?2:21:32The 20 SMA is overpriced and declining.2:21:36You could you could see how it is 2:21:38declining lower and overpriced. That's 2:21:40exactly what we want to see. So, we have 2:21:42this initial consolidation 2:21:45directly into the declining 20 MA right 2:21:47here and then we get the breakdown.2:21:49Exactly what we want to see. Look at 2:21:51this. We consolidate directly into the 2:21:5420 MA. Literally, as soon as it touched 2:21:56the moving average, that's when we broke 2:21:59down. And if you've watched my free 10 2:22:02plus hour course, which I highly 2:22:04recommend that you do, it'll completely 2:22:06build the foundation behind your 2:22:08trading. It's 100% free. It is genuinely 2:22:11better than most paid courses on the 2:22:13internet. It's in the description of 2:22:15this video, so you could begin watching 2:22:16it literally as soon as you finish this 2:22:19video right here. I actually also teach 2:22:21about the 20 MA in the free course, but 2:22:23you could use all of that education and 2:22:25combine it with this YouTube video as 2:22:27well. But if you've watched it, you know 2:22:29that I only really trade two types of 2:22:32strategies, and they are correction 2:22:34strategies. And I'll get to what that 2:22:36means in just a second. But the only 2:22:38strategies I trade are really you get a 2:22:41move higher, you get a dip, then it sets 2:22:44up as a buy setup, and then I'll trade 2:22:46the continuation higher in that uptrend 2:22:48or it moves up, it consolidates, and 2:22:52then I will trade the breakout. This is 2:22:54essentially the foundation of my 2:22:56strategies. I keep it very simple. These 2:22:59are really the only strategies I trade,2:23:00as you'll see later in this video when I 2:23:03break down my real trades. But that's 2:23:04what we got here. consolidation 2:23:07breakdown, consolidation, breakdown, and 2:23:10I use the 20 period moving average as my 2:23:15way of knowing when to position myself 2:23:18into the trade. All right, let's look at 2:23:20a at another example here. And honestly,2:23:23just just I don't even need to explain 2:23:25it. It's so simple to look at. Just look 2:23:29at how many times price respects the 20 2:23:34MA within this uptrend. Like as soon as 2:23:36it started curling here, this was kind 2:23:39of like the start of the uptrend right 2:23:41here. It kind of almost touched it right 2:23:43here. Right here. Right here. It 2:23:46literally touched the tail touched it.2:23:48The tail touched it right here and then 2:23:50immediately started moving higher.2:23:51Right. Let me move this here.2:23:54Okay. Same thing. So here again, hit the 2:23:5820 MA started rallying. Hit the 20 MA.2:24:01The tail touched the 20 MA. it it kind 2:24:03of broke through the 20 period moving 2:24:05average here, immediately got rejected 2:24:07to the downside, and then continued 2:24:08higher. Especially right here, you could 2:24:10see like it's obvious, it's simple, and 2:24:13that's the reason why I use it. Even 2:24:14like any beginner could look at this and 2:24:16being and be like, "Yeah, wow. Price 2:24:19really respects the 20 period moving 2:24:21average during an uptrend." And every 2:24:24single time it touched the 20 MA, if you 2:24:27went long, you would have made money,2:24:29right? Just so it's a little bit clear.2:24:31Every time it touched the 20 MA, if you 2:24:34went long, you would have made money 2:24:36every single time during this uptrend.2:24:38And that's exactly why I used a 20 2:24:40period moving average. I'm not saying 2:24:41you should have went long. I'm not 2:24:43saying every single one of these 2:24:45pullbacks, every single buy setup here 2:24:47is a quality setup, but if you just 2:24:49bought it every time it hit the 20 MA,2:24:51you would have made money. This is 2:24:53actually a chart of Bitcoin at $30,000.2:24:58I think this was like the 4hour chart or 2:25:00maybe the daily chart. I don't even need 2:25:02to explain it what's going on. It's 2:25:04simple enough for any beginner to look 2:25:07at this and immediately understand 2:25:09what's going on. Right? Let me get the 2:25:10pen tool. We moved up. Then we kind of 2:25:13retraced and then consolidated into the 2:25:17rising 20 MA. Right? What's the 20 2:25:19period moving average doing? It's under 2:25:20price, trending higher, under price,2:25:23trending higher, under price, trending 2:25:24higher. You got you guys get the idea.2:25:26[snorts] Soon as it hit the 20 MA 2:25:28breakout did the same thing based 2:25:30directly into the 20 period moving 2:25:32average literally touched it boom 2:25:35massive breakout. So in this case how 2:25:37would I enter the trade? So for a 2:25:39breakout like this I would either enter 2:25:41above the base right here or if you want 2:25:44extra confirmation you could uh enter 2:25:46above the base here and then where's 2:25:48your stop loss? Below the base and I 2:25:52mean it would have made you a ton of 2:25:53money. Very high reward to risk trade.2:25:55And this is why I use the 20 MA. It's 2:25:57simple, but it is a gamecher during 2:26:00uptrends or downtrends, during trending 2:26:03markets. And I would argue that we as 2:26:07traders should only be trading during 2:26:10trending markets. It's super cliche, but 2:26:13the trend is your friend. Why would you 2:26:16trade in a sideways market when there's 2:26:19no clear direction? I want to trade in 2:26:22the direction of the trend. the markets 2:26:24are telling me, hey, I'm going in this 2:26:26direction, whether it's higher or 2:26:28whether that's lower. I identify that 2:26:30and I think to myself, okay, cool. The 2:26:33markets are telling me prices are 2:26:34higher. We're in a trend. I want to go 2:26:37in the direction of that trend. Because 2:26:40the probability that I'm going to make 2:26:41money increases because I'm trading with 2:26:44the direction. It's like if you're 2:26:45driving on the highway, would you want 2:26:47to drive with the flow of traffic or 2:26:50against the flow of traffic? Well, if 2:26:52you drive against the flow of traffic,2:26:53you're probably going to crash into a 2:26:55car. It's dangerous. The same thing 2:26:57applies for trading. Why would I try to 2:27:00catch the top and go for reversals when 2:27:02I could trade with the trend? Now, I 2:27:05still do trade reversals. However, they 2:27:07are inherently more difficult than 2:27:10trading with the trend. I see way too 2:27:12many beginners that only trade 2:27:14reversals. It's like you guys are making 2:27:16it harder for yourself. Trade with the 2:27:18trend. And once you get a little bit 2:27:20better as a trader, once you're, you 2:27:22know, you have a little bit more 2:27:23finesse, you know what you're doing, you 2:27:24have more experience, you have more 2:27:26reps, that's when you can begin getting 2:27:27aggressive with reversals. All right,2:27:30hopefully all of that makes sense. Now,2:27:32like I just showed you, I trade either 2:27:34breakouts or retracements, and that's 2:27:36how I use the 20 period moving average.2:27:38And what you want to do is time your 2:27:40entries when prices are either at or 2:27:44near the 20 MA. don't need to be like 2:27:47literally touching the 20 MA for you to 2:27:50position yourself in the trade, but they 2:27:51have to be at or near the 20 MA. So,2:27:55that's a rising 20 MA. If it's an 2:27:57uptrend, like we have right here, rising 2:27:5920 MA, we want to be buying at or near 2:28:02the 20 period moving average, right? And 2:28:04the opposite applies during a downtrend.2:28:07You have a downtrend, we want to be 2:28:08buying or in this case, shorting at or 2:28:12near the 20 MA, right? In this case, it 2:28:14perfectly touched the 20 MA, but you're 2:28:15not always going to get that. And then 2:28:17there's and and that begs the question,2:28:19why why does it need why do prices need 2:28:22to be near or at the 20 MA? Because 2:28:25there's this concept called extension.2:28:28The way you can think of this is the 2:28:30greater the distance 2:28:33uh between price and the 20 MA that is 2:28:36known as extension. You can think of 2:28:38extension as overbought if it's like you 2:28:42know in an uptrend going you know if 2:28:44it's moving up or oversold if it's in a 2:28:47downtrend. We don't want to be buying or 2:28:50positioning ourselves when prices are 2:28:53extended. We want to be positioning 2:28:55ourselves when prices have corrected 2:28:58when they're near the 20 MA. So you 2:29:01could use the 20 MA for that. You could 2:29:03use it for measuring how overbought or 2:29:06how oversold a stock or a crypto or 2:29:09forex pair or whatever your trading is.2:29:12All right? And we ideally always want to 2:29:14be getting into it when it's near or at 2:29:17the 20 MA. So, you could actually use 2:29:19this idea of extension of prices being 2:29:22super far away from the 20 MA for 2:29:24reversal opportunities like this right 2:29:27here. Like take a look at this. Let me 2:29:30get the pen out and let me make it white 2:29:31so you could see it. Take a look at 2:29:33this. Look at how well prices have 2:29:36respected the 20 MA during the uptrend.2:29:39Check this out. Literally perfectly 2:29:42perfectly 2:29:43every single time it touched the 20, it 2:29:46went up. You would, if you went long,2:29:48every time it hit the 20, you would have 2:29:49made money. Except right here. Notice 2:29:51how it started to kind of go parabolic 2:29:55right here. and all of a sudden we had 2:29:57extension between price and the 20 MA.2:30:01This is when a trend is exhausted. When 2:30:04a trend is exhausted, that means the 2:30:06trend is beginning to end. Funny enough 2:30:09that rhymes, but hopefully that makes 2:30:11sense. And the way you can measure 2:30:13whether a trend is exhausted is the 2:30:15distance between price and the 20 MA.2:30:19Right? So in this example right here,2:30:21you could see that there's kind of 2:30:23distance between price and the 20 MA.2:30:25And if you want to see what happened 2:30:27right after, well, I have that 2:30:29screenshot. This is what happened.2:30:31That's when the trend ended and we 2:30:34actually moved lower and then we ended 2:30:36up rolling over and kind of going 2:30:37sideways and almost actually starting a 2:30:39downtrend right after this, right? So,2:30:42as soon as the trend was exhausted, this 2:30:44is actually a really good opportunity to 2:30:46potentially catch a reversal and go 2:30:48short. So, you could use the 20 MA for 2:30:51reversals as well, right? um by 2:30:55identifying when the trend is exhausted 2:30:57and then positioning yourself going 2:30:59against the trend because you know trend 2:31:01is exhausted there's not enough buyers 2:31:03there's not enough buyers we're probably 2:31:04going to see lower prices and that's 2:31:06when we can position short so in this 2:31:07case I would probably enter enter 2:31:09underneath the lows of this bar as a 2:31:12short stop-loss over the highs all right 2:31:14I don't want to get too into reversals 2:31:15in this video but hopefully that makes 2:31:17sense here's a really good example of 2:31:19that real fast before we hop into the 2:31:21more practical stuff I don't want this 2:31:22video to be too long 2:31:24We we made a massive move, right? The 2:31:27trend was kind of exhausted, massive 2:31:30distance between price and the 20 MA.2:31:32And this is precisely where you can look 2:31:34to go and play the reversal and and uh 2:31:37capitalize on prices moving up and you 2:31:40know catching this long. So hopefully 2:31:42that makes sense. So we usually want to 2:31:44do the 20 MA within an uptrend or a 2:31:46downtrend. However, you can use it 2:31:47during reversals if the trend is 2:31:50exhausted, if there's major distance 2:31:52between price and the 20 MA. Hopefully,2:31:56this makes sense. And let's go ahead and 2:31:58hop right into the reall life examples.2:32:01One thing that I definitely want to 2:32:02emphasize before we continue is that 2:32:05when you are trading within an uptrend,2:32:07whether it's a a breakout or whether 2:32:09it's a retracement, you're essentially 2:32:11trading the idea of price correction.2:32:14the idea that if a if the market moves 2:32:17up significantly, right, we need to see 2:32:20a price correction before we can make 2:32:23another leg up. Like in this case, we 2:32:25moved up significantly, we retraced and 2:32:29then we consolidated into that rising 20 2:32:32MA. As we were consolidating, we were 2:32:36correcting. Prices were performing a 2:32:38correction before it was ready to run 2:32:41the next marathon and have the next move 2:32:44higher. And that's exactly what happened 2:32:45next, right? We moved up. The market ran 2:32:48a marathon. The the market put the next 2:32:50leg up. It can't just continue higher 2:32:53forever. It needs to correct. It needs 2:32:55to rest. And that resting, that 2:32:58correction can either happen through a 2:33:00retracement or a consolidation. In this 2:33:03case, it happened through a 2:33:04consolidation into that rising 20 MA.2:33:07And then we could trade the next leg up.2:33:10So hopefully that makes sense. When 2:33:11we're trading within an uptrend, we're 2:33:12essentially trading this idea of price 2:33:15correction. This idea that once prices 2:33:18have finished correcting within that 2:33:20trend, we buy and we take advantage of 2:33:23the next move up if it's in an uptrend 2:33:25or the next move lower if it's in a 2:33:27downtrend. Okay, so I have my Think or 2:33:29Swim platform up. I have the daily chart 2:33:32right here. I have the two-minute chart.2:33:34I have the five minute chart. And then I 2:33:36have the 15-inut chart. And a lot of you 2:33:38guys are probably wondering, okay, cool.2:33:40I get all of that seems simple enough,2:33:42but number one, how do you use it in 2:33:45practice? And number two, on which time 2:33:48frames do you use it on? And you need to 2:33:50understand that I use multiple time 2:33:53frames. This is called multiple time 2:33:56frame analysis. And we're looking for 2:33:59multiple time frame alignment. I'm not 2:34:02just using one time frame. Throughout 2:34:04the trading day, I am always looking at 2:34:07the daily chart. And then in the 2:34:09morning, I'm focusing on the one and the 2:34:11two-minute chart. And then as the day 2:34:12progresses, I focus on the five-minute 2:34:14chart and the 15-minute chart. All while 2:34:17looking at the daily and the hourly. I 2:34:20am constantly looking and analyzing my 2:34:23trades off multiple time frames because 2:34:26it gives me multiple perspectives of 2:34:29what's going on in that stock and that 2:34:31gives me a better idea on whether that 2:34:34trade is going to make me money or not.2:34:35It just deepens my analysis. I have a 2:34:37better perspective of what's going on.2:34:39All right, so a lot of the trades that 2:34:41I'm about to talk about, I'm going to go 2:34:42through this relatively quick. I 2:34:44personally made money on this week or I 2:34:46watched it this week or it was on our 2:34:49favorites list in the morning this week.2:34:50So these aren't like cherrypicked 2:34:53examples from months ago. These were 2:34:55literally trades from either yesterday 2:34:57or Thursday. And this is how I used the 2:34:5920 MA. So let's look first at the DCGO.2:35:02Why did I focus on the DCGO yesterday?2:35:05Well, number one, it was a really 2:35:06interesting gap down on Thursday. It 2:35:09closed at around 2:30 right here. Zoom 2:35:12in. And then yesterday it opened at 190.2:35:15The reason I thought it was interesting 2:35:17on the daily chart is because it gapped 2:35:18down underneath support, underneath the 2:35:22all-time lows, directly under support,2:35:24and it gapped underneath this move 2:35:26higher. I'll probably make another video 2:35:28going more into gaps and how I trade 2:35:31gaps on the daily chart, but this is why 2:35:32I was focusing on it. And right off the 2:35:35bat, if you just look at the two-minute 2:35:38chart in the morning, I mean, look at 2:35:40this. We dropped. I'm going to kind of 2:35:41zoom in here. Look at this. Just 2:35:44beautiful setup. We dropped, we kind of 2:35:47retraced, moved in, moved a little bit 2:35:51back down, and look at this 2:35:52consolidation.2:35:54Beautiful base breakdown directly into 2:35:58the declining 20 period moving average.2:36:00I went short right here and I put my 2:36:03stop loss uh right above the base and 2:36:05caught this move lower. Beautiful,2:36:08beautiful setup. Now, once again, look 2:36:11at, for example, the five-minute chart,2:36:13right? Even later into the day, and this 2:36:15was closer to like 12:30 to the end of 2:36:18the day, look at how well prices are 2:36:21respecting the 20 period moving average,2:36:23right? You can see there it's just 2:36:24trading off of it. Look at the 15-minute 2:36:27chart right here. Um, we moved down, we 2:36:30retraced, dropped it a bit, and we just 2:36:33based based based based based right into 2:36:36the declining 20 MA. And then we got the 2:36:38breakdown. And this trade right here, I 2:36:40think this ended up making me like 600 2:36:42bucks. I couldn't get that much size uh 2:36:44because [snorts] I couldn't get filled,2:36:45but short under the base stop loss above 2:36:47it. Like literally on this trade, two 2:36:51different really interesting setups that 2:36:54worked that completely just consolidated 2:36:56into that declining 20 MA. Beautiful on 2:36:59the DCGO. Let's look at another example.2:37:01Envax. This thing made me like $2,500 at 2:37:04the end of the day yesterday, right?2:37:06This wasn't an interesting gap. It just 2:37:08started to move down. But what I really 2:37:10want to show you is this. Check this 2:37:12out. So, this thing was consistently 2:37:14downtrending all day. You could see like 2:37:16on the five, you could see how well 2:37:18prices are respecting the 20 MA. It's 2:37:21not completely declining, but it is more 2:37:23or less like, but you could see how well 2:37:25prices are respecting it. Now, right 2:37:27here, it started to break down 20 MA 2:37:30over price. This is the 5m minute. Even 2:37:32on the 15, if you look at the higher 2:37:33time frames, when we got closer to here,2:37:36right, it got closer to the 20 MA and it 2:37:39was getting ready to break down. Then I 2:37:41went to the smaller time frame. This is 2:37:43how I use multiple time frames. Look at 2:37:45this 2-minute base right here. I mean,2:37:47beautiful, unreal. Like, look at this.2:37:49It dropped based right into that 2:37:52declining 20 MA on the two and we got 2:37:54this breakdown. I got like 14,000 shares 2:37:57right here and I caught this move lower.2:37:58Ended up making me like 2500 bucks.2:38:01really really beautiful trade. But you 2:38:02could see how I'm combining multiple 2:38:04time frames. Um downtrend on the five 2:38:07respecting the 20 MA right here. It's 2:38:09way too extended from the 20 MA on the 2:38:1115 and needed to consolidate and correct 2:38:14before it did this breakdown. Right.2:38:17Really, really nice. And then on the 2:38:182-minut, we got that 20 MA breakdown.2:38:21Beautiful, beautiful, beautiful stuff.2:38:22Next, [snorts] we got the PLX. Another 2:38:25really, really interesting setup here.2:38:27All right, so let's kind of analyze it.2:38:29What do we got? Nice gap down. Look at 2:38:32this. It closed at 289 the previous day.2:38:35Next day opened at 240. Look at this 2:38:38massive move lower. Uh and the gap was 2:38:41the catalyst for that move. And look at 2:38:45the 15-minute chart. We dropped retraced 2:38:49based based based directly into the 20 2:38:52MA. It didn't quite touch it, but it was 2:38:53at or near, remember I said near near 2:38:56the 20 MA. Then we got the breakdown and 2:38:58then honestly just time ran out and it 2:39:00didn't make that next move lower. You 2:39:02look at the five, look at this. We 2:39:03dropped retraced into the five minute 20 2:39:06MA. Then we got another drop, but then 2:39:08the day ended. All right, even on the 2:39:10two-minute chart, you could see like 2:39:11it's how well right here it's respecting 2:39:13the 20 MA. This is why I use it. It's 2:39:15like multiple time frames are telling me 2:39:17the same exact thing. That's why I get 2:39:19so confident using it. Oh, the IOA. Uh 2:39:23the main thing I want to show you is 2:39:24actually the one minute chart. This was 2:39:26right off the morning. Check this out 2:39:27right here. Check this out. We dropped.2:39:31This was actually one of my top watches.2:39:33And I tried to scalp this three times 2:39:35yesterday. First three of them lost 2:39:38money. I was down 700 bucks and then 2:39:40right here it retraced right into that 2:39:43declining 20 MA. And right here it 2:39:45literally touched it. I went short at 2:39:4794. I remember 94. I went short and I 2:39:50caught this whole move lower. made all 2:39:52of my money back plus another $1,200 on 2:39:55the IOA. I think that was my NPNL on it.2:39:58Let me check.2:40:00Uh let's see what was my NPNL on the 2:40:02IOA.2:40:05Yeah, 1,200 bucks literally. All right,2:40:07let's move on. So, that was really,2:40:09really nice. Let's look at Oh, this is 2:40:10another This isn't even that high 2:40:12quality of a trade. But number one, look 2:40:14at the five. Began um the uptrend rising 2:40:1820 MA, retraced right into it, moved 2:40:21higher. Even look at the 15. We moved 2:40:24up, retraced right into the 20 MA,2:40:26bounced right into the 20 MA, bounced,2:40:29and we continued higher. Beautiful,2:40:30beautiful setup. And hopefully this just 2:40:32gives you an idea of how you're using 2:40:33it. Look at this. Open. Open was my 2:40:35biggest trade yesterday. Um, take a look 2:40:38at the two-minute chart and the 2:40:40five-minute chart. By the way, this is a 2:40:42beautiful gap down as well under 2:40:43support. Look at this. Dropped based 2:40:47right into the 20 MA drop. Based right 2:40:49into the 20 MA on the downtrend. Amazing 2:40:52move. This made me over 4,000. Um, and 2:40:54they opened right here on the 2-minut.2:40:55Same thing. We we combined multiple time 2:40:58frames. Same thing. We based right into 2:40:59the declining 20A. It's the same things.2:41:01You guys are seeing how freaking useful 2:41:03it is. Even the Kodak yesterday was 2:41:06which was really good. Look at this. We 2:41:08moved down, retraced, moved down, based 2:41:10at the lows right into the declining 20 2:41:12MA and the 15 and then we got the follow 2:41:15through and the breakdown lower. Had a 2:41:16really interesting daily gap as well. It 2:41:19gapped under two green bars. So, it 2:41:21trapped all of the buyers from the last 2:41:22two days. Same thing with the five. You 2:41:25could see how it's declining. The GMAD 2:41:28was one of my best trades in the morning 2:41:30as a matter of fact. And if we look at 2:41:32this, I went short right here. And then 2:41:36you could see how well it respected that 2:41:38downtrend. But I went short uh let me 2:41:39clean it up. Uh right here when it 2:41:42consolidated into that 20 MA, went short 2:41:44and made money. Very good. Let's move 2:41:47on. CRVS, same thing here. Not even that 2:41:49great of a setup, but look, respecting 2:41:51the 20 MA on this 5minute move higher,2:41:53especially here. Really nice little 2:41:55retracement. And then here as well on 2:41:57the 15. Beautiful. Respected the 20 MA.2:42:00Not a high quality setup, but you guys 2:42:02get the idea. Lyft. Look at this lift.2:42:05Power trend it. This was a big gap up on 2:42:08the daily chart. I think it had earnings 2:42:09gapped up, right? So nice bullish 2:42:12catalyst in the morning. Moved up based 2:42:16on the breakout. And look at this. I 2:42:18mean, every time it hit the 20 MA, moved 2:42:19up. If you just rode out this power 2:42:22trend, it would have made you money 2:42:23literally all day. Um, let's see what 2:42:25else. [snorts] Um, the go- go. Same 2:42:28thing with this. Um, didn't quite hit 2:42:31the 20 MA, but this was a nice breakout.2:42:33Um, and then it respected the 20 MA as 2:42:35it was moving higher. We really want 2:42:37that 20 MA to be trending and not flat,2:42:39right? Let's look at the CRVX. Same 2:42:42thing here. Just I mean, all of these,2:42:44if you just look at every time frame, it 2:42:46really respects the 20 MA. Even this 2:42:48this is uh this actually got bought and 2:42:51then went climactic. Was a nice short. I 2:42:53didn't take it. And then even on the way 2:42:56on the on the way down, look at this.2:42:58During the downtrend, perfectly 2:43:00respected the 20 MA. I mean, every 2:43:02single setup, I'm basically showing you 2:43:04guys this. It's the same exact thing.2:43:06And this is what I do every single day 2:43:09in my trading. Now, I obviously don't 2:43:10just use a 20 MA. I have an I have 2:43:13exceptional mastery of knowing the 2:43:16quality of the setups, what criteria go 2:43:18into a high quality setup. You can learn 2:43:20all this in my free 10 plus hour course.2:43:22Watch it in the description of this 2:43:23video. I also combined using level two.2:43:26I made a YouTube video about that 2:43:28obviously with my knowledge on how to 2:43:30trade gaps on the daily chart which are 2:43:32bullish or bearish catalyst for that 2:43:34stock. Gaps can occur because of all 2:43:36sorts of reasons. I also have a YouTube 2:43:37video about that. Watch it. So, it's not 2:43:40just the 20 MA, but I'm combining the 2:43:43usefulness of the 20 MA with everything 2:43:45else that I know about trading, and it 2:43:47just just creates way more higher 2:43:51probability setups. It is truly unreal.2:43:53And this is why I use it. It's the only 2:43:55indicator I use. Same thing here on the 2:43:57zip based right into the declining MA.2:43:59Attempted to break down. Not much follow 2:44:01through, but you guys get the idea.2:44:02Insane, insane stuff. Even this CTMX,2:44:05look at this 20 MA starting to trend 2:44:07lower. This one's a little sloppy, but 2:44:08same idea, right? Hopefully you guys get 2:44:11the point. These were literally trades 2:44:13from the last few days that I was able 2:44:15to make money on using the 20 MA with my 2:44:18knowledge of setups, with my knowledge 2:44:20of order flow, and just knowing 2:44:21everything that um I'm good at with 2:44:23trading. Combine it all and it creates 2:44:25really high probability setups. This is 2:44:27what allows me to make money, guys. It 2:44:29it's what allows me to get results like 2:44:31this because I keep it simple and you 2:44:34should, too. Hopefully, you found this 2:44:36video incredibly useful. Please leave a 2:44:38like, subscribe to the channel. I'm 2:44:40constantly posting uh really educational 2:44:43and valuable videos that you could 2:44:44actually use to make money with.2:44:46[snorts] Um, subscribe, like, leave a 2:44:48comment. Um, if you found this valuable,2:44:50and if anyone who's watching is looking 2:44:52for a serious hands-on mentor that you 2:44:55could trade live with every single day,2:44:57I do I will be transparent. I do have a 2:45:00mentorship where I help scale and coach 2:45:02traders from zero to making 10 to 2:45:04$50,000 per month. I I had plenty of 2:45:08students that surpassed5 to $20,000 this 2:45:11past week trading alongside of me,2:45:13right? Like I made 11,000 or I guess 2:45:15$10,800 yesterday. I had plenty of 2:45:18students that hit anywhere between 500 2:45:20to$7,000 with me just yesterday. If 2:45:23you're looking for a hands-on serious 2:45:24mentor that will work with you until you 2:45:26find success, there's a uh application 2:45:28below. Um, I'm very selective with who I 2:45:31work with because I only like to work 2:45:33with dedicated, disciplined, and 2:45:34professional traders or traders who want 2:45:36to be professional. So, fill out the 2:45:38application if you're interested, but 2:45:39make sure you also get started with my 2:45:40free 10 plus hour course. And hopefully 2:45:42you find found this very educational.2:45:44I'll see you guys on the next video.2:45:47What is up, guys? Hope you're having a 2:45:49great day. I'm very excited for this 2:45:52section of the course because we are 2:45:54finally going to be going into some of 2:45:57the more exciting parts about trading 2:45:59and specifically we're going to be 2:46:01talking about the 20-day moving average 2:46:03today. And a lot of people out there,2:46:06they trade with different indicators.2:46:08Some people use MACD, RSI, Ballinger 2:46:12bands, um, and other super fancy 2:46:15indicators. And frankly, I don't use any 2:46:18of those. I keep my trading extremely 2:46:21simple, but one of the main, I guess you 2:46:24can call it an indicator, uh, one of the 2:46:25main indicators I do use is the 20-day 2:46:28moving average. And we're going to talk 2:46:30about how to use it and how to really 2:46:33take advantage of it because I 2:46:35personally believe it is the ultimate 2:46:39and most useful tool in trading. Okay,2:46:43so first let me show you guys how to 2:46:45actually put it on your Trading View 2:46:47charts. And let me turn off my camera.2:46:51All right. So, once you have this blank 2:46:54chart, you've selected candles right 2:46:56here on Trading View. You're going to go 2:46:57to indicators and you're going to type 2:47:00in moving average. And you could just 2:47:03select the simplest one. It's going to 2:47:06pop up here. It's going to say MA. Just 2:47:09go to this settings tab, go to inputs,2:47:12and change the length to 20. And let's 2:47:16make I'm going to make mine white. Okay.2:47:19And there you go. The 20-day moving 2:47:22average is now on my charts, which is 2:47:26perfect. Now, let's go into how to 2:47:30actually take advantage of the 20-day 2:47:32moving average and how to use it. So,2:47:35moving average, this is one of the 2:47:37fundamentals of technical analysis. This 2:47:40is, I would say, just as equally 2:47:42important as learning and understanding 2:47:45the candlesticks. It's just as important 2:47:47understanding how to use the 20-day 2:47:49moving average. So, let's talk about 2:47:52what are moving averages. Moving 2:47:54averages, they are lines that represent 2:47:57price action in a particular time frame.2:48:01Okay? So, if we're talking about, let's 2:48:03say, the 20-day moving average, that 2:48:05line shows you the average price within 2:48:10the last 20 days, right? If you have a 2:48:12200 day moving average, which is another 2:48:15one that I use, that shows you the 2:48:18average price of that stock or crypto in 2:48:21the last 200 days. So, it's calculated 2:48:25by taking the average of a set of prices 2:48:27over a specific number of days in the 2:48:29past. So, like I just said, 20-day 2:48:32moving average, it would be 20 that it 2:48:33would be the average price of the past 2:48:3620 days.2:48:38A lot of people also ask me about 2:48:40exponential moving averages. That's 2:48:43calculated through uh emphasizing more 2:48:45recent price action. So, the equation 2:48:47that you use for an exponential moving 2:48:49average, it puts larger weight onto the 2:48:54most recent price action and it's much 2:48:57more responsive to new information 2:48:59that's coming out with that starker 2:49:01crypto. Okay? It's it just weighs more 2:49:03recent price action, heavier in the 2:49:06equation. And it doesn't really matter 2:49:08which one you use. You could use either 2:49:11or, but just make sure you stay 2:49:13consistent with it. If you have the 2:49:14simple day moving average, right, make 2:49:18sure you keep that um across all of your 2:49:20charts. And if you use exponential, make 2:49:23sure you use the exponential on all of 2:49:24your charts.2:49:26So, the moving averages, especially the 2:49:2920-day moving average, it's the ultimate 2:49:32stock or crypto directional guide. It 2:49:36shows where a stock or a crypto is 2:49:38trending and how much momentum it has.2:49:41So, it's a directional guide, right? And 2:49:45uh specifically, I know a lot of people 2:49:48they use the 10 MA, but I personally I 2:49:51only use the 20-day moving average and 2:49:52the 200 day moving average. We're going 2:49:54to be talking about the 20 during this 2:49:56class. So, let's talk about some key 2:49:59guidelines. A rising 20-day moving 2:50:02average is indicative positive market 2:50:06strength. Okay, that mean that means 2:50:08it's bullish. There are more buyers than 2:50:12sellers.2:50:13We want to see price and the 2:50:16candlesticks above the rising 20-day 2:50:19moving average. Okay, that shows 2:50:22strength, positive market strength. A 2:50:26declining 20-day moving average trending 2:50:28lower shows negative market weakness.2:50:32And in that case, we want to see price 2:50:35below the 20-day moving average. and 2:50:38that would show bearishness or a you 2:50:40know negative uh you know it would show 2:50:43market weakness. The sharper the slope 2:50:46of the moving average the stronger or 2:50:49weaker the trend is and we're going to 2:50:51look at examples of that.2:50:53During a bullish uptrend, right? We know 2:50:56what an uptrend is. Now, during a 2:50:57bullish uptrend, stocks tend to retrace 2:51:00or pull back to the rising 20-day moving 2:51:03average. That's why we want the 20-day 2:51:05moving average above price. Because 2:51:08during bullish uptrends, we see price 2:51:11actually pull back or retrace to that 2:51:14rising 20. During a bearish downtrend,2:51:17stocks, they tend to retrace or rally 2:51:20during uh to the declining 20-day moving 2:51:22average. Right? So during downtrends,2:51:25they retrace to the declining 20-day 2:51:27moving average.2:51:29Um, so whenever you hear the term 2:51:33extended, when price is extended, that 2:51:36means price is far away from the 2:51:38trending 20-day moving average. So if I 2:51:40ever say extension or extended, it means 2:51:43price is far away from the 20-day moving 2:51:46average. There's distance between price 2:51:49and the 20 MA. And in general, guys,2:51:52always trade in the direction of the 2:51:5520-day moving average, especially if 2:51:57you're a beginner. Trade with the trend.2:51:59Don't go against the trend.2:52:02So, this is an example here where we 2:52:04have a rising 20-day moving average and 2:52:08it is under price. You could see that 2:52:10the candlesticks are over price or I'm 2:52:13sorry, the candlesticks are over the 2:52:1520-day moving average. And we can see 2:52:18that during a bullish uptrend, right, we 2:52:20have higher highs,2:52:21higher lows. price tends to retrace or 2:52:26pull back to the rising 20-day moving 2:52:29average and then from there it increases 2:52:31again, pulls back to the 20-day moving 2:52:33average, increases again, pulls back to 2:52:35the 20-day moving average. Okay? And um 2:52:39so my question for you guys is, can you 2:52:42find the different types of candles that 2:52:44we've learned about narrow range bars,2:52:46tails, or igniting bars? take a look at 2:52:48this chart and try to pinpoint 2:52:51some of the different candlesticks we've 2:52:53learned about. Go ahead and pause the 2:52:55video and just try to write them down.2:52:57I'll give you guys a second to do that.2:53:00Okay, so what we have here is we have a 2:53:04clear topping tail right here, right?2:53:06Huge tail. The sellers have taken 2:53:08control. Price then dropped. And then we 2:53:12have right here an igniting bar, right?2:53:16where the uh opening price is near the 2:53:19lows, the closing price is at the highs 2:53:21and it ignites a new move higher. We 2:53:24also have one here, right? Ignites a new 2:53:26move higher. And then right here we have 2:53:29two narrow range bars which you know are 2:53:33kind of our entry bars dur in this 2:53:35uptrend. And we're going to talk about 2:53:37entry bars later. Okay. But if you were 2:53:39able to identify these candlesticks then 2:53:42perfect. You're you're doing great so 2:53:44far.2:53:45Let's look at the uh 20-day moving 2:53:48average when it's declining.2:53:50Remember, when we have a falling or 2:53:52trending uh a falling and trending 2:53:5620-day moving average that's, you know,2:53:58trending lower, we see that price is 2:54:01under the 20-day moving average. And 2:54:03whenever price drops, it usually 2:54:05retraces to the declining 20, drops,2:54:09retraces to the declining 20, drops, and 2:54:12then now we could see that in this case 2:54:13it based into the declining 20. So the 2:54:1720-day moving average for both uptrends 2:54:19and downtrends, they could be kind of 2:54:21used as also support, right? It's kind 2:54:23of acting as support for the stock 2:54:25during an uptrend and it's acting as 2:54:27resistance for a stock or crypto during 2:54:30a downtrend. Hopefully this all makes 2:54:32sense guys.2:54:34Uh this is a sideways trend, right? We 2:54:37have it's kind of fluctuating between 2:54:38highs and lows. Whenever we have a 2:54:40sideways trend, we also usually have a 2:54:4320-day moving average that is flat and 2:54:46moving through price. Meaning there's no 2:54:49noticeable trend that's taking place.2:54:52And usually guys, whenever you have a 2:54:54flat 20-day moving average, it shows 2:54:56that there's a lack of trend and you 2:54:58should avoid that. So don't trade if you 2:55:02see a a flat moving average. It usually 2:55:04suggests that um there's no momentum,2:55:08there's no clear trend, and you know,2:55:11you generally want to stay away from 2:55:13stocks or crypto that are not trending,2:55:15right? The whole point something's 2:55:17trending, it has momentum, meaning we 2:55:19could take advantage of big moves higher 2:55:21[snorts] or we could short, you know,2:55:23big moves lower. Okay, [clears throat]2:55:26let's look at some examples.2:55:28You could see right here, this is the 2:55:3020-day moving average. We are trending 2:55:31higher, right? We are under price. You 2:55:34could see that every time price touches 2:55:37the 20-day moving average, every time it 2:55:38retraces to the 20-day moving average,2:55:41it goes higher. So, if you guys were to 2:55:43buy it, every time price touched the 2:55:4620-day moving average or got close to 2:55:48it, you would have made money. And once 2:55:51we go into the strategy section of the 2:55:54course, we're going to actually use the 2:55:5620-day moving average and create a 2:55:58strategy, right? And the strategy is,2:56:02you know, whenever it comes clo whenever 2:56:03it pulls back to the 20, that's what we 2:56:05buy. It's called a buy setup. We're 2:56:06going to be talking about that later.2:56:08Okay. In this case, we have a declining 2:56:1220-day moving average. This blue line,2:56:14you could see how how it's over price.2:56:16And you could see that, you know, price 2:56:18touches the 20 and drops. Prices the 20 2:56:20uh touches the 20 drops bases into the 2:56:2320-day moving average drops bases into 2:56:26the 20 drops. So you could see that the 2:56:2820-day moving average is acting as 2:56:30resistance here and it's declining. It's 2:56:33trending lower and we would short it 2:56:36every time it touches the 20-day moving 2:56:38average.2:56:40Let's look at another example. You could 2:56:43see how well price is respecting the 2:56:46rising 20-day moving average, right?2:56:49right here. Base, right? Right. As soon 2:56:53as it touches the 20-day moving average,2:56:55it breaks out. Same thing here. As soon 2:56:56as it touches, breaks out. And the main 2:57:00point here is that we could see that 2:57:01it's trending higher and it's under 2:57:03price. Okay.2:57:06Slope and extension of the 20-day moving 2:57:08average is significant. And we have to 2:57:10remember slope, right? That is the uh 2:57:13the measure of steepness of a line,2:57:16right? So, if you guys have ever taken 2:57:18math classes, you've I'm sure you guys 2:57:20have calculated the slope for different 2:57:22math questions before. But we got to 2:57:23remember 20-day moving average is a 2:57:25line, right? When we when we measure the 2:57:27slope of it, we measure how steep it is.2:57:30So, we want to, you know, ideally we 2:57:31have something that's 45°. 45° is ideal 2:57:35because it shows that it's sustainable,2:57:39right? The move is sustainable.2:57:41The uptrend is sustainable. If it's 2:57:44higher than 45 degrees, right? Where if 2:57:46it's kind of like this is more or less 2:57:4845 degrees, but if it's even steeper 2:57:50than this, then it shows that the move,2:57:52the current move is not sustainable. If 2:57:55it's less than 45°, then it's going to 2:57:58be on the more flat side, and you know,2:58:02it's not it's going to lack momentum. We 2:58:04talked about before how we want to avoid 2:58:06trading flat moving averages. flat 2:58:08moving averages specifically for the 20 2:58:11for the 20 MA. Uh when it's flat, it 2:58:14shows lack of momentum. We don't want to 2:58:16trade stuff that doesn't have momentum.2:58:19And the distance or extension between 2:58:21price and the 20-day moving average 2:58:22tells us if it's overbought or oversold.2:58:25So, let's go into it. You could see we 2:58:27have a solid uptrend. The moving average 2:58:30is kind of it's a little bit it's not 2:58:32quite at 45°, so it's a little bit flat,2:58:34but still price is respecting it. And 2:58:36you could see how it's getting steeper 2:58:37and steeper and steeper and eventually 2:58:40we have a large distance between the 2:58:43candlesticks and the moving average 2:58:45right here. This is uh extension, right?2:58:49This is distance between price and the 2:58:5120-day moving average. And you could see 2:58:52that 2:58:54um the moving average was getting 2:58:56steeper and steeper and steeper and 2:58:58eventually this move was no longer 2:59:00sustainable and we ended up I remember 2:59:03dropping after this. You could see how 2:59:06well price is respecting the rising 2:59:0820-day moving average. Uh same thing 2:59:11here. I believe this is on Bitcoin. We 2:59:13broke out here. 20-day moving average 2:59:16trending higher. It's under price.2:59:18Touched it here. Popped. You could see 2:59:20every time it retraces to the 20, it 2:59:22continues the uptrend. And right here is 2:59:25when we have extension. So, this is 2:59:27where you would want to look for a short 2:59:28position, right? We have extension from 2:59:31the 20-day moving average. And you can 2:59:33see the steeper it got, the less 2:59:35sustainable the move was. And we ended 2:59:36up dropping and base and, you know,2:59:38starting to go sideways here. Okay,2:59:41let's look at another example. Same 2:59:43thing here. We're uptrending.2:59:45The 20-day moving average is under 2:59:47price, trending higher. Every time price 2:59:50touches it, it rallies. You can see how 2:59:52well it's respecting it. Here it got a 2:59:55little steeper. You could see right here 2:59:57it starts to get steeper. Then we have 2:59:59extension, right? We have distance 3:00:01between price and the 20. Here we don't 3:00:04really have any distance. Every time we 3:00:06have distance, it pulls back. But here 3:00:08we have, you know, pretty significant 3:00:09distance and extension. And then we 3:00:11ended up dropping from there. Okay. So,3:00:14we would look for a short in this 3:00:15position.3:00:18Another example. You could see how well 3:00:20it's respecting the 20. And then you can 3:00:22see the 20 is getting steeper, steeper,3:00:24and steeper. And from right here, this 3:00:26is no longer sustainable. This is where 3:00:28we're going to be looking for a short,3:00:29especially with the extension that we 3:00:31have. Okay.3:00:34So, another uh very useful way to use 3:00:37the 20-day moving average is for 3:00:38spotting price transitions.3:00:41When stocks or cryptos are ready to 3:00:43transition into an uptrend or a 3:00:47downtrend, the moving average will begin 3:00:49to curl and hug under price for a 3:00:52transition higher or curl and hug over 3:00:55price for a transition lower. This is 3:00:58really effective for the larger time 3:01:00frames and for longer term trades or 3:01:02swing trades. And you know, usually the 3:01:05time frames you're going to be looking 3:01:07at is the hourly, daily, weekly, or 3:01:09monthly. Let's look at some examples.3:01:11As you could see here, this stock, I 3:01:14believe this is actually AMC. This stock 3:01:16is sideways, right? We don't have a 3:01:18clear trend, right? It's not really 3:01:20going anywhere during this time period.3:01:22You could see the moving averages flat 3:01:25and moving through the candles through 3:01:28price until right here. You could see 3:01:31that we have a rally and the 3:01:32candlesticks were halted by the curling 3:01:3520-day moving average. They stopped here 3:01:37and that's when we had the breakout. the 3:01:40price transition. As soon as we started 3:01:42curling under price and pointing higher,3:01:47same thing here when the 20-day moving 3:01:49average is trending higher, you could 3:01:51see price is respecting it. But as soon 3:01:54as the moving average becomes flat and 3:01:56moves um you know moves into price 3:02:00through price, we could see it doesn't 3:02:02respect it until right here. We see 3:02:04price is starting to respect it. We're 3:02:06seeing it curl higher and that's when we 3:02:08get the breakout and we go higher. So,3:02:10you can see that right before these big 3:02:13breakouts, the 20 MA is curling under it 3:02:17and starting to point higher.3:02:19Let's look at PRTA. This is a really 3:02:21good example where um PRTA, we could see 3:02:25that the 20-day moving average is 3:02:27starting to curl under price, right?3:02:29Starting to curl under and point higher.3:02:32And we could see that this is clearly a 3:02:34price transition. And this is the 3:02:37monthly chart. So each one of these 3:02:39candlesticks represents a month. And 3:02:40that's where we had the big breakout as 3:02:42soon as it started curling under price 3:02:44like that. But if we go to the daily 3:02:47chart of PRTA, so every one of these 3:02:50candlesticks represents a month. If we 3:02:52go into the daily chart, right, then we 3:02:57see something a lot more interesting 3:02:58where uh when the moving average is 3:03:01going through price, it's flat. We don't 3:03:03have any moves. But as soon as it starts 3:03:05to curl higher and under price, that's 3:03:08when we get the transition higher. Okay?3:03:11Same thing here. Soon as it moves under 3:03:14price and curls higher, that's when we 3:03:16make a move up.3:03:18Same thing here. It's flat, trendless,3:03:20nothing's going on right here. It starts 3:03:23to respect the 20 MA, starts to curl 3:03:26higher, and that's when we have the 3:03:28breakout, right? And you can see as soon 3:03:32as it started trending, that's when we 3:03:33started continuing higher.3:03:35And uh okay, this is the last slide. So 3:03:38trade with the trend, guys. Your odds of 3:03:40success are greatly increased when 3:03:42you're playing in the same direction of 3:03:45the 20-day moving average.3:03:47The correct entry is when price is at or 3:03:50near the 20-day moving average, not when 3:03:53it's far away. Let me show you an 3:03:55example of that. Right.3:03:59So, we want to be buying it during this 3:04:02uptrend when the moving average is below 3:04:04price. We want to be buying it when 3:04:06price is at the 20 MA because when it 3:04:09hits the 20 MA, it goes up. When it hits 3:04:11the 20 MA, it goes up. When it hits the 3:04:1420 MA, it goes up. So, we want to be 3:04:15buying it when it's at or near the 3:04:1720-day moving average. Just like we want 3:04:20to be shorting it when it's at, right?3:04:24Rallies into the 20, we short. Rallies 3:04:26into the 20, we short. Goes into the 3:04:2820-day moving average, short. Goes into 3:04:31the 20, short. Okay? And as soon as we 3:04:34see some price extension, that's when we 3:04:36begin to rally because we're extended.3:04:39Okay? Hopefully that makes sense, guys.3:04:42Uh, let's go. And the 20-day moving 3:04:45average becomes extremely useful when 3:04:47you pair it with tradable patterns and 3:04:49strategies. So, we're going to be 3:04:51combining this 20-day moving average 3:04:53with a real trading strategy later in 3:04:56the course. So, you don't want to just 3:04:59enter because you have a rising um or 3:05:02declining 20-day moving average. You 3:05:04want to have a pattern. And there's 3:05:05specific things we look for in that 3:05:08pattern when you combine it with the 20.3:05:10We're going to we're going to talk about 3:05:11that a little bit later.3:05:13Okay. So, main points here is that it's 3:05:17an excellent directional guide and it 3:05:19shows you what's going on with the 3:05:21trend. If it's uh if we have a uptrend,3:05:26we want the 20-day moving average under 3:05:28price and trending higher. If we have a 3:05:30downtrend, we want the move the 20-day 3:05:31moving average over price, trending 3:05:34lower. If it's sideways, it's not really 3:05:36that effective. Okay, that's kind of the 3:05:39summary here. Make sure you kind of 3:05:40watch this class a bunch of times. And 3:05:42my biggest recommendation, guys, is go 3:05:45and put the moving average, the 20-day 3:05:48moving average, right, on some of your 3:05:49charts and just start watching, you 3:05:53know, how price actually respects it 3:05:56during uptrends or downtrends, okay? And 3:05:59you'll just watch how price really 3:06:02trades off of it, and that's what makes 3:06:04it such a powerful and useful tool. So,3:06:06make sure you do that. And this was an 3:06:08excellent class, guys. U looking forward 3:06:11to seeing you guys in the next one.3:06:12Thanks.3:06:13>> Let's hop right into the video. So step 3:06:15number one, you're going to go to 3:06:16indicators on your trading platform.3:06:18Right now I am on tradingview.com.3:06:21Now for my own personal day trading, I 3:06:23use Think or Swim. Now you're going to 3:06:26see tons of different complicated 3:06:29looking indicators. You're going to see 3:06:31crazy names like the Shandai Croll stop.3:06:34You're going to see Elder Force index.3:06:36You're going to see like Williams 3:06:38alligator and you're going to be 3:06:40overwhelmed. You're going to be 3:06:41confused. Which one do you actually use 3:06:44and you're going to want to actually 3:06:46ignore all of these fancy sounding 3:06:50indicators and your goal is to keep 3:06:52things simple. So, what you're going to 3:06:54do is look up moving average. Okay?3:06:58You're going to look up moving average 3:07:00and you're going to see all these 3:07:01different types of moving averages. Now,3:07:03what you want to do is doubleclick on 3:07:06simple. You're going to click it once,3:07:07and then you're going to click it one 3:07:09more time. Once you do that, you're 3:07:11going to see these two moving averages 3:07:13pop up in the top left, and you want to 3:07:16hover over one of them, and you want to 3:07:18go to settings. And once you do that,3:07:21all you need to change is you want to 3:07:23change the length of nine, change it to 3:07:2620, and then press okay. Now, go to the 3:07:29other one and do the same exact thing.3:07:31Hover over it, go to settings, and from 3:07:34here, change the length to 9, and this 3:07:37time you're going to change it to 200.3:07:40And voila. These are the only two 3:07:44indicators I have ever used in my 3:07:46trading. Now, I also use volume. I don't 3:07:48really consider that an indicator, and 3:07:50I'm going to make a separate video on 3:07:51that. So, make sure you subscribe to the 3:07:53channel to watch that video as well.3:07:55But, I've only ever used two simple 3:08:00moving averages. I think the simplest 3:08:02things in life are oftentimes the most 3:08:05brilliant. I have never used MACD. I've 3:08:07never used stochcastics or VWAP or RSI 3:08:11or Elliot wave theory or Fibonacci. I 3:08:13keep it simple. And a lot of you guys 3:08:16are going to watch this video and be 3:08:17like, "Oh my god, two simple moving 3:08:20averages. Like what? Like I thought I 3:08:23thought you would be using all these 3:08:24complex tools." No, I don't use any 3:08:27fancy indicators. I keep it simple. And 3:08:30funny enough, these are two of the most 3:08:33powerful indicators you will ever use in 3:08:36your trading. And I'm about to show you 3:08:38why. Finally, let's talk about the 200 3:08:40period moving average. And this is 3:08:42actually even simpler. So, what we're 3:08:44looking for is for a flat 200 period 3:08:48moving average. The 20 MA, we wanted 3:08:50that to be trending whether it's 3:08:52uptrending or downtrending. And we don't 3:08:55want the 20 MA to be flat. It's the 3:08:57opposite for the 200. We want the 200 3:09:00period simple moving average to be 3:09:02relatively flat. And the 200 MA could 3:09:05act as a ceiling for price whenever 3:09:09prices are trading below it. It could 3:09:11also act as a floor for prices whenever 3:09:14prices are trading above it. So what 3:09:16does that mean? Let's say you have a 3:09:17bunch of price action right here. This 3:09:19200 MA could act as resistance for this 3:09:24price action where a lot of time prices 3:09:26will go to the 200 and bounce from it.3:09:29Go to the 200 and bounce from it. So it 3:09:31could actually be a resistance area um 3:09:35for prices if prices are below the 200.3:09:39Now the same exact thing applies if it's 3:09:42support. If prices are trading above it,3:09:44let's say you have a bunch of price 3:09:45action. This 200 MA can act as support 3:09:49for price where prices will actually 3:09:51bounce from it and it's literally like a 3:09:54floor for price action. Now, this setup 3:09:58is quite rare. However, I do want to 3:10:00mention it. Every now and then, you'll 3:10:02get what's called a squeeze play where 3:10:05you have a flat 200 period moving 3:10:08average and then you have a 20 period 3:10:10moving average that is rising and going 3:10:13through this 200. And what you'll 3:10:16sometimes notice is prices will actually 3:10:19oscillate between the two where it's 3:10:22going to use the 200 as a ceiling, as 3:10:24resistance, and it's going to use this 3:10:2620 MA as support. And they'll continue 3:10:29to oscillate and oscillate and oscillate 3:10:31and squeeze until the point where it 3:10:33can't squeeze anymore, and it's just 3:10:35going to break out. And these setups are 3:10:37quite rare. However, they're extremely 3:10:40powerful. So, you want a flat 200 MA 3:10:44rising 20 MA that's going through the 3:10:46moving average. And you want to see 3:10:48prices oscillate between the two until 3:10:50eventually they can't, you know, there's 3:10:52no more room to oscillate and then they 3:10:54break out. And this honestly works 3:10:56better for like swing trading. So, I'd 3:10:58look at the daily or weekly time frame 3:11:00for this. All righty. Let's look at some 3:11:02fantastic examples on how you could 3:11:04apply the 20 and the 200 MA into your 3:11:07trading. And I'm going to give you my 3:11:09thought process on how I apply it in my 3:11:12own trading. And by the way, these are 3:11:13not like cherrypicked examples. These 3:11:15are all stocks that I was watching or 3:11:19that I traded this past week. Like this 3:11:21uh KDP, this is CUREG. This had an 3:11:24overnight gap down yesterday where it 3:11:26gapped from $35 and the next day it 3:11:29opened at 3250. And notice how we gapped 3:11:34directly below the 200 and how we opened 3:11:37below all of this support. So I was 3:11:40going into yesterday with a bearish 3:11:43bias. And I actually really like gaps 3:11:46that open below the 200. But let's take 3:11:49a look at the fiveinut time frame. This 3:11:51is one of the main time frames that I 3:11:53use. And look at how well prices are 3:11:57respecting the 20 MA on the five,3:12:00especially as soon as the 20 MA starts 3:12:03to actually establish a downtrend. As 3:12:05soon as the 20 MA is trending lower 3:12:08right here, basically notice how well 3:12:11prices are respecting the 20. So right 3:12:13here, this is a potential short 3:12:15opportunity directly under the base.3:12:17Dropped kind of based into the five, not 3:12:19quite dropped again. Look at this.3:12:22Consolidated directly into the 20 MA and 3:12:24the five. Next day we gap down a little 3:12:27bit and continue that downtrend. Now 3:12:29this is the 5m minute. Let's look at the 3:12:31two-minut especially today. And this is 3:12:34going to be shocking but look at this.3:12:36Look at how well prices are respecting 3:12:39the 20 MA on the two-minut. I mean,3:12:42every time it hits the 20 MA here, here,3:12:46right here, right here, right here,3:12:48every time it hits the 20 MA, it ends up 3:12:51dropping. And you could have literally 3:12:53went short every time prices hit the 20.3:12:56And it would have worked for this 3:12:58absolute beauty of a power downtrend.3:13:00And this is why I used the 20 during 3:13:03established downtrends. Notice how the 3:13:0520 MA is trending lower, very, very 3:13:07strongly. If we look at the 15, it's 3:13:09basically the same thing. Um, where the 3:13:1220 MA is trending lower. However,3:13:14there's a little bit of distance between 3:13:16price and the 20 MA. So, the 20 MA isn't 3:13:19being like fully respected on the on the 3:13:2215-minute chart. From there, you go to 3:13:24the smaller time frames to find your 3:13:26entries, but unbelievable 3:13:28daily gap that led to a beautiful 3:13:31downtrend where you could use the 20 MA 3:13:33for your entries to capitalize on this 3:13:35trend. Let's look at the BNS. This is a 3:13:38random stock that popped up today. This 3:13:40is the Bank of Nova Scotia. Um, and 3:13:42stemming back all the way from 2024 when 3:13:45this uptrend kind of reversed, you could 3:13:47see that we entered into a downtrend on 3:13:49this stock. And this is the daily time 3:13:51frame, by the way. Look at how well 3:13:53prices are respecting the 20 MA on this 3:13:56downtrend. The 20 MA is over price,3:13:59trending lower. We drop, retrace into 3:14:02the 20, drop, retrace into the 20. Here 3:14:05we actually gapped down like 8% and it 3:14:08gapped right into the 200 MA on the 3:14:12daily time frame. So this 200 MA acted 3:14:14as a floor for price. It acted as 3:14:17support for price. We gapped right into 3:14:19it. Instantly got bought then retraced 3:14:22into the 20, hit it perfectly, dropped 3:14:25again, hit it perfectly, dropped, and 3:14:27then right here the trend reversed and 3:14:29we went into an uptrend. And you could 3:14:31see for yourself. Look at how well 3:14:33prices are respecting the 20 MA. I mean,3:14:36I don't even need to explain it. It's 3:14:37literally obvious and it's simple.3:14:39That's exactly why I use the 20 and the 3:14:42200 MA. Even here, we had a gap up 3:14:44today. Literally today, we gapped up 2%3:14:47on a really bullish chart, really 3:14:49bullish trend, on a nice gap up. Go to 3:14:52the 15minute time frame to find a 3:14:54potential setup. And even on the 15,3:14:56look at how well prices are respecting 3:14:58the 20. We have a nice rally uh four bar 3:15:01red bar pullback. Nice little buy setup 3:15:04here. We kind of move up a little bit 3:15:06right into the 20 and then we take off 3:15:08and make new highs. And this is why I 3:15:11use the 20 and the 200 on the intraday 3:15:13time frames and even on the larger time 3:15:15frames because they're simple and they 3:15:17allow me to understand what the trend 3:15:19is. When I look at this chart, I know 3:15:20exactly what's going on. established 3:15:22downtrend, then an established uptrend,3:15:24and I know where I could potentially get 3:15:27into the trend using the 20 period 3:15:29moving average. Let's take a look at 3:15:31this RR, which had a really nice 3:15:33breakout the last couple days. But let's 3:15:36go back to 2024. And this is a really 3:15:38good example of a squeeze play where we 3:15:41have a rising 20 period moving average,3:15:44flat 200 period moving average. You 3:15:46could see prices hit the 200, then hit 3:15:48the 20, then hit the 200, kind of 3:15:51oscillated back and forth. It's not a 3:15:53perfect example, but once it broke out,3:15:55it really broke out. And this thing 3:15:57rallied like over 500%. Which is insane.3:16:00So, that's a decent example of a squeeze 3:16:02play, but that's not even what I want to 3:16:04show you in this example. Look at how 3:16:06well the 200 MA is acting as support and 3:16:10as a floor for this stock. Like, we hit 3:16:13the 200 here. Instantly, we bounce. Then 3:16:15we kind of chop around. We retest the 3:16:17200. We bounce here. We actually almost 3:16:21break down through the 200. That's 3:16:24instantly rejected. We move right back 3:16:26up again. We try to break through the 3:16:28200, rejected again. Right here, we try 3:16:30to break through the 200 to the 3:16:32downside, rejected, and then this time 3:16:34it led to a 62% move to the upside. And 3:16:37this is why I like to use the 200 MA.3:16:40Whenever prices are above it, it acts as 3:16:43a floor. It acts as support. And by the 3:16:45way, this is the daily time frame. Let's 3:16:47look at a good example of using the 20 3:16:49MA during the intraday time frame. So 3:16:51this stock had a very minor gap up. This 3:16:53was just a few days ago. It gapped up 3:16:562%. So it opened higher by 2%. It had a 3:16:59really nice green day. I'm seeing the 20 3:17:01MA on the daily time frame is starting 3:17:04to trend higher. It's under price. So I 3:17:07went into this day with a bullish bias.3:17:10And just take a look at this fiveinut 3:17:12time frame. just beautiful uptrend and 3:17:15it's beautifully respecting the 20 MA 3:17:18where we had a nice breakout here. We 3:17:20moved up, retraced to the 20, kind of 3:17:22chopped around, another move up, retrace 3:17:25to the 20, move up, retrace to the 20,3:17:27move up, retrace to the 20. And it's 3:17:30just respecting the 20 MA almost 3:17:33perfectly. And every time it hit the 20,3:17:35that was actually an opportunity to 3:17:37potentially go long. and just a 3:17:40beautiful uptrend with the 20 MA under 3:17:43price trending higher. Let's look at 3:17:45another example where we combine using 3:17:47the 200 MA on the daily time frame and 3:17:50then we use the 20 MA on the intraday 3:17:52time frame. So this MAT gapped from like 3:17:562018 and the next day it opened 6% lower 3:17:59at around 1890. Notice how we gapped 3:18:03directly below the 200. Literally 3:18:05directly below it. We didn't gap into it 3:18:08where it would act as support. We gapped 3:18:10right below it and we also gapped 3:18:12underneath a lot of this support as 3:18:15well. So beautiful gap down and from 3:18:19there we go to the intraday time frames 3:18:22to find a potential setup. So off the 3:18:24five here I mean again you could see how 3:18:26well prices are respecting the 20. The 3:18:29best setup was right here. Stop loss 3:18:33above basically. So this is the five.3:18:35Even if we look at the 2-minut again,3:18:38every time prices hit the two minute, 20 3:18:41MA, we get a move lower. We drop retrace 3:18:44to the 20 MA and the two drop. Then 3:18:46right here, notice, check, check this 3:18:49out. Right here, we attempt to break 3:18:51above the the 20. We attempt to kind of 3:18:54end this downtrend, break over the 20.3:18:56That was rejected. Then we continue to 3:18:58base the 20 acted as resistance and 3:19:00boom, we got another breakdown again 3:19:02right here. attempt to move past the 20 3:19:05breakdown, attempt to kind of go through 3:19:07the 20, breakdown. And you could see how 3:19:09well prices respect the 20 MA during 3:19:13this established downtrend on multiple 3:19:15time frames. Even if we look at the 15,3:19:18right? It's usually better to look at 3:19:19the smaller time frames for your entries 3:19:21into these day trades. But even on the 3:19:2215, 20 MA is over price, trending lower,3:19:25confirming that bearish downtrend. This 3:19:28is Coinbase from a few weeks ago. We 3:19:31have a rising 20 MA under price. We have 3:19:34a consolidation into that rising 20 MA.3:19:37200 MA is directly above. We gap above 3:19:41the 200 around 12% to the upside. Gap 3:19:44above the 200 triggering this base 3:19:47breakout on the daily time frame. 20 MA 3:19:50is under price. You go to the 15minut 3:19:52time frame for a potential setup and 3:19:54beautiful uptrend. Let's look at the 3:19:56five. And you could see, look at that 3:19:59five. how well prices are respecting the 3:20:0120 MA. We have that initial move up. We 3:20:04consolidate directly into the 20 3:20:06breakout over the base. Nice move up,3:20:09retracement into the 20. Look at how 3:20:11well it's respecting the 20 and then we 3:20:13have another leg higher. We retrace 3:20:15another move up. So, you could see how 3:20:17well prices respect the 20 MA. And this 3:20:20is exactly why I use it on multiple time 3:20:23frames. Let's finish off this video by 3:20:25looking at the S&P 500, the SPY. So this 3:20:29bottomed out in April and since then we 3:20:31have been up only and during this 3:20:34uptrend what do you know look at how 3:20:36well prices are respecting the 20 MA 3:20:39even on the spy. So we have a nice move 3:20:42up retrace into the 20 nice move up here 3:20:45we consolidate into it. Then we have 3:20:47another breakout from the 20. We try to 3:20:49retest it on this tail. Instantly we 3:20:52move up here. We actually broke under 3:20:54the 20. This was a few weeks ago. We 3:20:56broke under the 20, instantly rejected.3:20:59Have a another nice move higher. Here we 3:21:01have a retracement. Nice buy setup into 3:21:03the 20. Boom. And now it looks like the 3:21:06spy wants to continue higher. We can 3:21:08even look at like crypto. Let's take 3:21:10Ethereum. Look at how well Ethereum is 3:21:13respecting the 20 MA over the last few 3:21:15months. We have a rising 20 MA under 3:21:17price here. It kind of broke below,3:21:20instantly rejected, and we had a nice 3:21:21move higher. We retraced right into the 3:21:2420. literally hit the 20 instantly. We 3:21:27popped another red bar, hit the 20,3:21:29boom, the next day we have a nice green 3:21:31bar. This was on uh the Jackson Hole um 3:21:34drone Powell speech. Then we retrace,3:21:37hit the 20, boom. Um today, literally 3:21:40another green bar. Um even if you look 3:21:42back just a few months ago, I bought a 3:21:45 ton of Ethereum right here because 3:21:47I saw that the 20 MA started to 3:21:49transition higher. It's curling up. The 3:21:5220 MA is under price trending higher. We 3:21:54have a nice move up based into the 20.3:21:57This was a beautiful breakout and what 3:22:00do you know? It hit target at the 200.3:22:02So the 200 acted as a ceiling for 3:22:05Ethereum where it hit the 200 retraced.3:22:07Hit the 200 retraced. Hit the 200 3:22:10retraced. Hit the 200 retraced. Here we 3:22:13broke through. We kind of had a fake out 3:22:14and then a fake out to the downside. 20 3:22:17MA is flat, so it's not that useful. And 3:22:19then as soon as the 20 MA begins rising 3:22:21and trending under price, that's when 3:22:23Ethereum starts respecting it and it 3:22:26resumes or resumed the uptrend. And I'm 3:22:28still expecting much higher prices for 3:22:31Ethereum. And that is exactly why I use 3:22:33the 20 and the 200 MA for every single 3:22:36one of my charts that I look at. I like 3:22:38to keep it simple, guys. All I use are 3:22:40two moving averages, the 20 and the 200.3:22:43And by keeping it simple, that's what 3:22:45allows me to make money. So hopefully 3:22:47this could be transformative for your 3:22:49trading and hopefully this will help you 3:22:51keep it simple. So make sure you 3:22:53subscribe to the channel if you enjoyed 3:22:55this video. Leave a comment if you found 3:22:57it valuable. Leave a like. That's going 3:22:59to help the YouTube algorithm. And 3:23:01hopefully you learned a lot and I will 3:23:02see you on the next video. Thank you 3:23:04very much. What is going on guys? Glad 3:23:08that you've made it to this section of 3:23:10the course. And today we're going to be 3:23:12talking about multiple time frame 3:23:15analysis.3:23:17And I've mentioned this in previous 3:23:19classes, the importance of using several 3:23:21different time frames while you're 3:23:24trading. And that is an extremely 3:23:27important concept. In fact, I will say 3:23:31that it is probably one of the biggest 3:23:35beginner mistakes that I see is that 3:23:38traders are not using multiple time 3:23:40frames when they're analyzing a specific 3:23:43stock or crypto. they're only using one 3:23:45time frame and then they're making bad 3:23:48decisions from it because they're not 3:23:50considering the overall context, overall 3:23:53landscape of what's going on with that 3:23:54stock. Right? So, let me turn off my 3:23:57camera here and we're going to get into 3:24:00multiple time frame analysis. So, key 3:24:02concept here, guys, like I said, like I 3:24:05just mentioned, not checking multiple 3:24:07time frames when you're trading. One of 3:24:09the largest largest beginner mistakes 3:24:11you can do. You are literally trading 3:24:14blindly if you're only considering one 3:24:18time frame prior to taking a trade. You 3:24:20really are. And the probabilities of a 3:24:23trade working in your favor 3:24:26significantly increases when there is 3:24:29multiple time frame alignment. When 3:24:31several time frames are all saying the 3:24:34same thing about a stock or a crypto,3:24:37that's when you could look to take 3:24:38advantage of a potential move either 3:24:41higher or lower. And you don't want to 3:24:44take trades where there's a conflict 3:24:48between the time frames, right? So,3:24:49let's kind of talk about that. So, what 3:24:52is multiple time frame alignment? It 3:24:54means it's when you know several time 3:24:56frames are aligned. They're all saying 3:24:58the same thing. They're either all 3:25:00saying that it's bullish or they're all 3:25:02saying that it's bearish or they're all 3:25:04saying that, oh, there's no momentum.3:25:06It's actually a sideways trend. Okay, so 3:25:08let's go over one example here. The 3:25:10daily chart is bullish. It's uptrending.3:25:14And the 20-day moving average is 3:25:17trending higher and is under price. The 3:25:20hourly chart is also bullish with a 3:25:23rising 20 MA under price. Right, the 3:25:2615-minute and the five-minute are also 3:25:29both very bullish with rising 20-day 3:25:32moving averages. And the 15-minute chart 3:25:35also has a breakout pattern, which we 3:25:38haven't learned about that yet, but uh 3:25:41we will learn about that. So, it also 3:25:42has a beautiful breakout pattern, right?3:25:45So, let's compare this example to 3:25:48example number two where the same thing.3:25:51The daily chart is bullish. It's up 3:25:53trending. the 20 MA is rising and uh 3:25:55trending under price. However, the 3:25:59hourly chart has a declining 20-day 3:26:02moving average that's curling over 3:26:04price, right? And remember, when it's 3:26:05declining and when it's curling over 3:26:08price, that suggests, you know,3:26:10bearishness. It suggests that prices are 3:26:12going to go lower. The 15-minute chart 3:26:15is sideways and has a flat 20-day moving 3:26:19average. And remember, when it's flat,3:26:21that means it's trendless. there's lack 3:26:23of momentum. And the five-minute chart,3:26:26however, looks bullish with a trending 3:26:2820-day moving average that's 3:26:30underpriced. Which trade has a higher 3:26:33probability of succeeding, right? The 3:26:36example one where every single time 3:26:39frame, you know, doesn't matter if it's 3:26:42the larger time frames such as, you 3:26:44know, going at the uh daily or hourly 3:26:46chart or the lower time frames, that's 3:26:48the 15 minute or five minute chart. All 3:26:50of them are screaming bullish. All of 3:26:52them are the, you know, are giving you 3:26:55the same information that the stock or 3:26:58crypto looks higher. Or are you going to 3:27:00choose example two where you have one 3:27:03time frame showing higher, another time 3:27:05frame showing lower, one time frame 3:27:08showing that there there's no momentum 3:27:10at all, and then this time frame saying 3:27:12that it's higher. Right? You could see 3:27:14that there's we don't have multiple time 3:27:16frame alignment in example two. And we 3:27:20obviously we would prefer seeing example 3:27:22one. So you can quickly see the 3:27:24importance of having multiple time 3:27:27frames all giving you the same 3:27:30information. And here we have a great 3:27:33example of uh of conflict between the 3:27:36time frames, right? We have different 3:27:38time frames telling us different 3:27:41different uh types of information. Okay?3:27:44So obviously example one has the higher 3:27:46probability of succeeding. So let's talk 3:27:49about what time frames you should 3:27:51actually be looking at. And we're going 3:27:53to be talking about crypto uh day 3:27:54trading first. So something to note,3:27:58crypto markets are 24hour markets,3:28:00meaning they don't close. They operate 3:28:03on a 24-hour schedule. There's always 3:28:05buying and selling in the crypto 3:28:07markets. So step one, always check the 3:28:12higher time frames, meaning the daily 3:28:15and the weekly charts to see the overall 3:28:18context on how the how the crypto is 3:28:21trading. You're looking at the long 3:28:23larger term or longer term trend, right?3:28:27Step two, you're going to move on to the 3:28:29hourly chart, see what's going on there.3:28:31And then step three, you're going to go 3:28:34to the five and 15 minute charts. And if 3:28:37you're scalping, which is taking really,3:28:39really short trades, really quick 3:28:41trades, then you're going to be looking 3:28:42at the one or two minute charts. So the 3:28:44point is here, guys, we're starting at 3:28:46the larger time frames and we're moving 3:28:49to the smaller time frames, right? We're 3:28:50seeing what are the larger time frames 3:28:52telling me, and then we're going to go 3:28:54to the smaller time frames and see if 3:28:57those time frames are telling you the 3:28:58same thing and if we could potentially 3:29:00find a str a strategy or an entry.3:29:04Okay. So, hopefully hopefully that makes 3:29:06sense. For stock day trading, um it's a 3:29:11little bit different because the stock 3:29:12market uh in the US equities market is 3:29:15open from 9:30 a.m. to 400 p.m. Eastern,3:29:19and that's Eastern time. Okay? So, as a 3:29:22result of that, there are going to be 3:29:24price gaps that occur. And we're going 3:29:27to be talking about price gaps a little 3:29:29bit later, but just know that in the US 3:29:32equities market,3:29:35you know, it opens and closes at a 3:29:37specific time. Okay. So, step one, what 3:29:40you're going to be doing is always look 3:29:43at the daily chart first to see if the 3:29:46stock is gapping and for overall context 3:29:49on how the stock is moving. So, once 3:29:51again, we're starting at the larger time 3:29:53frames.3:29:55Then you're going to move to the hourly 3:29:57chart for further context to see if you 3:30:00can get any information from that to see 3:30:01if the hourly chart u aligns with the 3:30:05daily chart that we did in step one. And 3:30:09[snorts]3:30:10while you're, you know, keeping an eye 3:30:12on the larger uh on the higher time 3:30:14frames, and this is of course Eastern 3:30:16time zone, from 9:30 to 10:00 a.m. you 3:30:18want to be looking at the 1 to 2 minute 3:30:20charts. From 10:00 a.m. to 11:30 a.m.,3:30:24you're going to want to be looking at 3:30:25the 2 minute and the five minute charts.3:30:27[snorts] And from 11:30 a.m. to 4 pm,3:30:30you want to be looking at the 5 minute 3:30:32and 15 minute charts. Okay? So, just 3:30:34write this down and keep these time 3:30:36frames in mind. But even if you're 3:30:39trading at, let's say, 2:00 p.m. and 3:30:41you're looking at the five and 15 minute 3:30:42charts, you want to always have a look 3:30:46at the daily chart to see if it's 3:30:48gapping and what's going on with the 3:30:51daily chart, right? What overall trend 3:30:53is is seen and you know, how is it 3:30:57trading?3:30:58For crypto and stock swing trading, you 3:31:02number one, you you're going to want to 3:31:04look at the daily chart and the weekly 3:31:07chart, okay? And identify potential 3:31:10setups. So, go to the daily and the 3:31:12weekly chart, see what's going on, see 3:31:14how it's overall trending, try to find 3:31:17specific setups,3:31:19and step two, then look at the hourly to 3:31:22find potential entries. So once you 3:31:24found the strategy or the setup that 3:31:27you're playing on the daily or the 3:31:28weekly chart, then go to the hourly to 3:31:31find some potential entries so you can 3:31:33take advantage. Okay, so main time 3:31:35frames are the hourly, daily, and weekly 3:31:37charts. Okay, so now we're going to 3:31:40practice. Now we're going to analyze 3:31:43some more stocks in crypto for you guys 3:31:45so you guys can get the hang of uh hang 3:31:48of it on how to of how to practice 3:31:50multiple time frame alignment. and we're 3:31:52going to be kind of showing you 3:31:55what it looks like when multiple time 3:31:56frames are aligned and what it looks 3:31:58like when we actually have conflict 3:32:00between the between the different time 3:32:02frames. Okay, so hopefully this all 3:32:04makes sense guys. This is uh this is a 3:32:06very very important topic. Okay, so make 3:32:10sure just please make sure you're always 3:32:12looking at different time frames. Okay,3:32:14and just follow the framework that I 3:32:16set. Always start at the larger time 3:32:19frames and then move to the lower time 3:32:21frames. And when you have the larger 3:32:24time frames saying uh bullish and then 3:32:26you have the smaller time frame saying 3:32:28bullish and the 20-day moving average 3:32:30looks good and the 200 day moving 3:32:32average looks good and you have an 3:32:34actual playable pattern, which we're 3:32:36going to learn about soon, then you 3:32:39could actually take the trade and make 3:32:41some money off of it. But you could see 3:32:43the multiple time frame alignment part 3:32:45of it is key. It's crucial that all of 3:32:47the time frames are telling you the same 3:32:49information. It increases the likelihood 3:32:52of success for that trade. All right,3:32:55guys. We're going to do a practice 3:32:57session next. So, see you then. And 3:32:59we're going to actually uh you know,3:33:01learn how to do this not just in theory,3:33:03but in practice as well. So, thanks,3:33:04guys. In this video, I'm going to 3:33:06completely reshape the way that you look 3:33:09at time frames. And what if I told you 3:33:11that I don't actually use one specific 3:33:14time frame for all of my trades? And to 3:33:18show you how you should perceive using 3:33:20time frames, we're going to use an 3:33:22analogy. Imagine we have a mountain 3:33:25right here. And let's say you are at the 3:33:27bottom of the mountain. This is you 3:33:30chilling. You're at the bottom of the 3:33:32mountain. I have a question for you. Are 3:33:34you truly going to have a perspective of 3:33:38what's going on around you when you're 3:33:40at the bottom of the mountain? Like, are 3:33:42you going to understand what the 3:33:43landscape is around you, where the hills 3:33:45are, where the birds are, where the, you 3:33:48know, creeks are, the lakes, the rivers,3:33:50whatever. Are you going to have a 3:33:52perspective of what's going on around 3:33:53you? Well, not really. You're literally 3:33:55at the bottom of the mountain. Like,3:33:57imagine being at the bottom. You can't 3:33:58really see what's going on around you.3:34:00But as you move up the mountain, right,3:34:04let's say you're right here. Are you 3:34:06going to have a better perspective of 3:34:08what's going on beneath you at this 3:34:10point of the mountain? Well, absolutely.3:34:12You have a much better perspective. You 3:34:14could somewhat see the landscape, the 3:34:17trees, the lakes, etc. You have a better 3:34:20perspective than when you were at the 3:34:22bottom of the mountain. Now, let's say 3:34:24you're at the top of the mountain. Are 3:34:26you going to have a better perspective?3:34:27Well, of course. In fact, you're going 3:34:29to have the ultimate perspective of 3:34:32what's going on beneath you and around 3:34:34you because you're at the top. You see 3:34:36everything that's down below. You know 3:34:38what the landscape is. You know where 3:34:39the rivers are. You see everything 3:34:41because you're at the top of the 3:34:43mountain. You have the ultimate 3:34:44perspective. And this is the way that I 3:34:46would perceive and understand time 3:34:49frames. When you're at the bottom of the 3:34:51mountain, that's like looking at smaller 3:34:53time frames in your trading. And then as 3:34:55you move up and up the mountain, that's 3:34:58like looking at the higher the larger 3:35:02time frames in your trading where the 3:35:04larger time frames they give you 3:35:06perspective on what that stock or what 3:35:09that crypto whatever you're trading 3:35:11whatever it is doing. It gives you the 3:35:12ultimate perspective. It gives you the 3:35:15kind of long-term bias of what's going 3:35:17on. And then as you go down the 3:35:19mountain, you could, you know, your 3:35:21perspective kind of shrinks and shrinks 3:35:23and shrinks. And this is the way that I 3:35:25would think about time frames. And the,3:35:28you know, the point that I'm trying to 3:35:29make here is it's not about using one 3:35:33time frame. There are so many videos on 3:35:35YouTube that will tell you use exactly 3:35:37these time frames and you'll find 3:35:39success. No, that's not what trading is 3:35:41about. Trading is about multiple time 3:35:45frame analysis. Right? And this is one 3:35:47of the biggest mistakes that most 3:35:49beginner traders make. They don't look 3:35:51at multiple time frames before they 3:35:54enter into a trade. And frankly, you are 3:35:57trading blindly if you're only 3:36:00considering one time frame before taking 3:36:02a trade. I want you to think about the 3:36:03last, let's say, 10 trades that you 3:36:05took. How many time frames did you look 3:36:07at before you entered into those trades?3:36:10What were you just looking at the five 3:36:12minute chart or the one minute chart and 3:36:13you entered and then ended up being a 3:36:15loser and you were like, uh, why was 3:36:16this a loser? I want you to ask 3:36:18yourself, be honest with yourself. Are 3:36:20you actually looking at multiple time 3:36:21frames? And if not, why not? And what 3:36:25we're looking for when we're reading 3:36:27multiple time frames is alignment.3:36:30Alignment. This is called multiple time 3:36:33frame alignment. Where multiple time 3:36:35frames are telling you the same thing,3:36:38right? They're all telling you what the 3:36:41stock is doing. They're not conflicting,3:36:43right? So alignment would be like five 3:36:45minute is uptrending, 15-minute is 3:36:48uptrending, hourly is uptrending, daily 3:36:50is bullish. That's alignment. Conflict 3:36:52would be like five minute is is in a 3:36:54downtrend, 15-minute is sideways, um 3:36:57daily is in an uptrend, hourly is 3:36:59sideways. Like that's not alignment.3:37:00That's conflict, right? And we're going 3:37:02to be looking at really specific 3:37:04examples of how this works. All right?3:37:07So, what I want you to focus on in this 3:37:09little example, in this exercise here,3:37:11because this concept is actually 3:37:13extremely simple. Looking at multiple 3:37:15time frames is really simple. And don't 3:37:17worry, I will tell you what time frames,3:37:19what multiple time frames I use in my 3:37:21trading every single day. That's a 3:37:22little bit later in the video. This is 3:37:25equally as important. I want you to look 3:37:27at the current time frame in each one of 3:37:29these examples. And what we're going to 3:37:31be doing is considering and asking 3:37:33ourselves, are we going to take this 3:37:36trade on the current time frame based on 3:37:38what the lower time frame is doing and 3:37:40based on what the higher time frame is 3:37:42doing. So let's look at this first 3:37:43example. What's the current time frame?3:37:44Well, it looks like we're in a very 3:37:46strong uptrend. We have a rising 20 MA 3:37:49under price and looks like we have like 3:37:50a buy setup retracement pattern. This 3:37:52looks bullish. It looks like we're we 3:37:54want to go long on the current time 3:37:56frame. So let's think about should we go 3:37:58long? What is the lower time frame 3:37:59doing? Well, the lower time frame is in 3:38:02a downtrend and looks bearish. Okay,3:38:05looking like it's actually going to 3:38:06drop. Declining 20. Higher time frame is 3:38:09essentially doing the same thing, right?3:38:11In a downtrend, declining 20 bearish.3:38:15Are we going to take this trade on the 3:38:16current time frame should be absolutely 3:38:19obvious. No, obviously not because the 3:38:21lower time frame is bearish and the 3:38:24higher time frame is bearish. Make 3:38:26sense? Easy enough. Let's move on. What 3:38:29about this situation? The current time 3:38:32frame, same exact thing. We're looking 3:38:34to go long for a buy setup retracement 3:38:36play. Strong uptrend. We want to go long 3:38:38and make money to the upside. Lower time 3:38:40frame looks good as well. Almost 3:38:42identical. Bullish uptrend looks good.3:38:45Higher time frame is bearish and in a 3:38:49downtrend. I want you to pause the 3:38:50video. Are we going to take this setup?3:38:54And the answer should be no. we're not 3:38:57going to take this setup. The, you know,3:38:59we always put more emphasis on what the 3:39:03higher time frame is doing. So in this 3:39:05case, the higher time frame is bearish.3:39:07If the higher time frame is bearish,3:39:09that's like the upward perspective,3:39:11right? That's like the top of the 3:39:12mountain is bearish, right? And then the 3:39:15bottom of the mountain is bullish. Are 3:39:17we going to take this trade? No. Right?3:39:19Because the higher time frame is just 3:39:21way more important than the lower time 3:39:22frames. This is what gives you the bias.3:39:24We always want to be trading in the 3:39:26direction of the higher time frame. All 3:39:29right, makes sense. Should be easy.3:39:30Higher time frames more important than 3:39:32lower time frames in terms of direction.3:39:35Next, we have the current time frame 3:39:37right here. Bullish looks higher. Great.3:39:40Lower time frame looks bullish. Higher 3:39:42uptrend, great. Higher time frame,3:39:44bullish, uptrend looks great. Perfect.3:39:47This is excellent. This is exactly what 3:39:49I want to see because the lower time 3:39:51frame is bullish in an uptrend. Current 3:39:53time frame is bullish in an uptrend.3:39:55Higher time frame is bullish and in an 3:39:56uptrend. Excellent. This is obvious.3:39:59Exactly what we want to see. This is 3:40:00multiple time frame alignment. Now let's 3:40:03look at this example. And this is going 3:40:04to be interesting. Current time frame 3:40:07looks good. Uptrend same exact, right?3:40:09We want to go long. Higher time frame 3:40:11looks good as well, right? You know,3:40:14uptrend bullish uptrend looks great,3:40:17right? Current time frame and higher 3:40:18time frame looks great. Remember, we put 3:40:20more emphasis on the higher time frame.3:40:22Everything's looking good. What is the 3:40:24lower time frame doing? Well, the lower 3:40:26time frame is bearish in a downtrend.3:40:29So, what do we do here? And you actually 3:40:32have two options. Your number one option 3:40:35is you could say, "Hey, I don't care 3:40:37about the lower time frame. The current 3:40:39time frame looks excellent. The higher 3:40:41time frame looks excellent. The old, you 3:40:43know, the longer term bias is on my 3:40:45side. I really like the quality of the 3:40:47setup. I don't care if the lower time 3:40:48frame is bearish because the current 3:40:51time frame and the higher time frame 3:40:52looks good. I'm taking the trade. That's 3:40:54option number one. Option number two,3:40:57you can be patient, maybe pass on the 3:41:00initial setup and wait for the lower 3:41:04time frame to turn bullish. Wait for 3:41:06this to uh um uh what's it called? Uh 3:41:10end the downtrend and begin an uptrend 3:41:12or wait for the 20 MA to start curling 3:41:14up. Right? You essentially wait for the 3:41:17the lower time frame to begin aligning 3:41:20or you uh you wait for the lower time 3:41:21frame to begin aligning with the current 3:41:23time frame with the higher time frame.3:41:24Jesus, the words mixed me up, but you 3:41:27guys get my point here, right? We wait 3:41:29for the lower time frame to begin 3:41:32looking bullish and that will give us 3:41:33our final confirmation to go long. So 3:41:37those are your two options in this case 3:41:38where the current time frame looks looks 3:41:40good, higher time frame looks good to go 3:41:42long, lower time frame is bearish, you 3:41:44could just take the trade anyway because 3:41:46you know you like the current and higher 3:41:48time frame or you wait for the lower 3:41:50time frame to turn bullish. Wait for the 3:41:5220 MA to begin rising, wait for the 3:41:54downtrend to end and for an uptrend to 3:41:57begin forming. Those are kind of your 3:41:59options. And this is the way I look at 3:42:00every single scenario, every single 3:42:03trade um in the markets. Excellent.3:42:05Let's go ahead and look at some reall 3:42:07life examples. And this was actually a 3:42:09trade that I took the other day or that 3:42:12I was considering taking the other day.3:42:14So let's look at this EOS on the 15 3:42:17minute time frame. All right. What do we 3:42:20have? We have a declining 20 period 3:42:21moving average. Looks good. We dropped,3:42:24we kind of retraced that drop. We moved 3:42:27down and then we began basing into the 3:42:29declining 20 MA on the on the 15minute 3:42:34chart. And we were gearing up for a 3:42:35breakdown. It looks like this wanted to 3:42:37break the lows of this base. That would 3:42:39be our entry. Stop loss above this 3:42:42pivot. It was looking good for a 3:42:43breakdown, right? I was actually 3:42:45considering this. Now, let's look at the 3:42:47daily time frame. What do we see on the 3:42:49daily? Well, the day before we had a,3:42:51you know, nice gap down, big move lower.3:42:53I actually made money on the EOSC this 3:42:55day. The next day, this is this day 3:42:57right here. So, this stat, uh, this 3:42:59setup is on this day right here. we gap 3:43:03down again and then we start, you know,3:43:05we attempt to move lower. Now, notice 3:43:07how we have the 200 period moving 3:43:09average acting as support. So, this is 3:43:13an example where the 15-minut time frame 3:43:16looks good to break down, looks good for 3:43:19a short, but the daily time frame is 3:43:21directly into the 200 period moving 3:43:24average, which is acting like support 3:43:26for this stock. And this is an example 3:43:28where we use multiple time frames.3:43:3115-minute looks good, but we have to 3:43:33check the higher time frame, which is 3:43:35the daily chart. And then we see that,3:43:38you know, this stock is into support.3:43:40So, what was the outcome of this trade?3:43:43Well, it didn't end up working. It 3:43:45actually ended up failing, right? It 3:43:47almost it basically triggered kind of 3:43:49triggered and then immediately failed 3:43:51and it would have hit your stop-loss.3:43:53But that trade could have been easily 3:43:56avoided by just looking at multiple time 3:44:00frames by looking at the current time 3:44:01frame and then looking at the larger 3:44:03time frame to see do we have support 3:44:05below. What is the overall trend on the 3:44:08larger time frame? Does it look good or 3:44:10not? Right? In this case, the overall 3:44:11trend was bearish, right? We had a gap 3:44:13down. We were continuing lower even on 3:44:15this day, but we had support at the 200.3:44:17So the setup ended up failing and I 3:44:20ended up avoiding this loss. Why?3:44:22because I looked at the higher time 3:44:24frame. I used multiple time frame 3:44:27analysis. Let's look at another example 3:44:28here. So, this stock actually gapped up 3:44:32on this day right here. Right? You could 3:44:34kind of see the 20 MA starting to curl 3:44:36under price. It looks like it's starting 3:44:39to form an uptrend, right? We have a 3:44:41low, high, low, high, low, high. Right?3:44:44We have an uptrend. And [snorts] then we 3:44:46have a kind of like a retracement buy 3:44:48setup here where we move up, we retrace.3:44:50We ended up actually gapping right here,3:44:53right? And I saw this um on this 3:44:55morning, right? I this this was like 3:44:57last week. So on the morning, I saw that 3:45:00we were opening at this price around 3:45:01$27. This was before the market actually 3:45:04opened. So this was the pre-market price 3:45:06that I was seeing for this stock. So 3:45:08what did I do? I went to the daily time 3:45:10frame and I checked, you know, does this 3:45:12stock have room to actually run? Where 3:45:15is the next resistance area if I decided 3:45:18to go long on this stock? And remember,3:45:20I'm a gap trader. So, as soon as I saw 3:45:22this gap up, you know, it's kind of 3:45:24clearing this little resistance here. I 3:45:26was interested in potentially going long 3:45:28on it. And I looked to the left and I 3:45:29saw, hey, we have a bunch of resistance 3:45:31here. This is the next resistance area.3:45:33And let's see how the trade ended up 3:45:35playing out. All right. And we ended up,3:45:39you know, moving higher. We we had that 3:45:41gap. We opened right here. A gap is an 3:45:43overnight change in price. So, you could 3:45:45literally see that there's a gap in 3:45:46price. Maybe I think this happened 3:45:48because of earnings or some news. That's 3:45:50irrelevant. I only really look at the 3:45:52price action, but we gapped up. I saw 3:45:54that we had room to run to the next 3:45:56resistance area, and that's exactly 3:45:57where we ended up kind of finishing off 3:45:59that uh that day's move. From there,3:46:02once we established there was a gap on 3:46:04the daily time frame, the gap had room 3:46:07to run to the next resistance area. We 3:46:09go to the smaller time frames, the uh in 3:46:12this case, the two-minut chart, right?3:46:15And we found a setup. We had a move up 3:46:17retracement and this is just a picture 3:46:20perfect buy setup. Picture perfect 3:46:22retracement pattern, right? 40 to 60%3:46:24retracement, multiple entry bars. Entry 3:46:27would have been over the highs of these 3:46:28dogee bars. Stop loss would be below 3:46:31this bottoming tail and we saw just an 3:46:33amazing move higher. And I actually 3:46:36teach the buy setup and this retracement 3:46:39pattern in my free 10 plus hour course.3:46:42It is genuinely better than most paid 3:46:44courses on the internet. I 100%3:46:46recommend that you watch it. It'll 3:46:47actually build the foundation for your 3:46:50trading. It is 10 plus hours of just 3:46:52pure sauce. Watch it and combine what 3:46:54you learn in my free education in my 3:46:57free course with everything that I teach 3:46:59on my YouTube channel. But hopefully you 3:47:01guys are kind of getting the idea here.3:47:02I don't want this video to be too long.3:47:04I kind of want this to be a rapid fire 3:47:06video for you to learn from. But 3:47:08hopefully this makes sense. We start off 3:47:10looking at the daily chart. We identify 3:47:12the gap, identify what the next 3:47:14resistance area is. It was a gap up 3:47:17above resistance. Love it. Then I went 3:47:18to the smaller time frames to find a 3:47:20potential entry. In this case right 3:47:22here, I found an entry on the intraday 3:47:25time frame. I checked the larger time 3:47:27frame to see if it looked good, to see 3:47:29what the trend was, to see if we had 3:47:31support beneath us, and we we ended up 3:47:34having support. and I ended up avoiding 3:47:35this trade and I avoided um losing money 3:47:38on this position because I checked 3:47:40multiple time frames. And this is kind 3:47:42of the system that you want to use. Now,3:47:44let's go ahead and cover what time 3:47:45frames I actually use for trading 3:47:48stocks. And right off the bat, I am 3:47:50always looking at the higher time frames 3:47:52for everything that I do. I'm always 3:47:55keeping an eye on the daily time frame 3:47:57and the hourly time frame for every 3:48:00single one of my trades. So, when the 3:48:01market first opens, I am primarily 3:48:03focusing on the 1 minute and the 3:48:05two-minute chart. And, you know, closer 3:48:08to 10:00 a.m., I'm definitely focusing 3:48:10on the five minute chart as well. Then,3:48:12from 10:00 a.m. to like 12:30 p.m., I'm 3:48:15focusing mainly on the 2-minut and the 5 3:48:18minute, primarily, really the five. And 3:48:19then, of course, a little bit of the 15.3:48:21As we move towards 12, 12:30, I'm more 3:48:25and more looking at the 15 minute time 3:48:27frame. And then from 12:30 to 4 p.m. I'm 3:48:30mainly looking at the five and the 15 3:48:31for my entries and for my setups. All 3:48:35right. And I do occasionally look at the 3:48:37one and the two-minute charts as well 3:48:39just for extra confirmation. And you 3:48:42know this is what I do. And I'm always 3:48:45looking at the daily and hourly. Right?3:48:46So it's in conjunction. It's not like 3:48:49only this time frame or only that time 3:48:51frame. We're looking at multiple time 3:48:53frames. And that's what gives me an edge 3:48:55compared to other traders. I'm really 3:48:56good at analyzing multiple time frames 3:48:59because every now and then you'll get a 3:49:00setup that looks amazing on the five,3:49:03amazing on the 15, even looks kind of 3:49:04good on the daily, but then the hourly 3:49:06will be into resistance, right? Or the 3:49:09opposite. Maybe the intraday time frames 3:49:12aren't that great. Maybe the five and 3:49:14the 15 are okay setups, but the hourly 3:49:18and daily chart have, you know, a 3:49:20fantastic setup where it was a high 3:49:23quality gap up or gap down. The hourly 3:49:26chart looks amazing, but the 15 and the 3:49:29five don't look as good. Sometimes I'll 3:49:31still take that setup um because of how 3:49:34good the higher time frames are. Does 3:49:37that make sense? So, it's really, you 3:49:39know, I'm always emphasizing the higher 3:49:41time frames and the current time frames.3:49:42All right. And don't get hung up on the 3:49:45exact time of day, right? It doesn't 3:49:47matter like if it's like 9:57,3:49:50you know, that's not like there's no 3:49:51like exact time where I transition to 3:49:53another time frame. It's kind of like 3:49:55flexible. I'm very free with my trading.3:49:57I'm kind of looking at all of them to be 3:49:58honest. In terms of swing trading, we're 3:50:00primarily looking at the hourly time 3:50:02frame, daily time frame, weekly time 3:50:04frame, or monthly time frame. Monthly 3:50:06time frames are a bit much, right? A lot 3:50:09of times you don't really need to look 3:50:10at the monthly. It's mainly hourly,3:50:12daily, weekly. If you find a setup off 3:50:15the weekly time frame, you want to go to 3:50:17the daily time frame to find a setup. If 3:50:20you find a setup on the daily time 3:50:21frame, you want to go to the hourly time 3:50:24frame to find a setup. Right? So, let's 3:50:26say you find a setup on a particular 3:50:28time frame, on a higher time frame. You 3:50:30can go to the smaller time frame to find 3:50:33an entry for that setup. And this will 3:50:36allow you to find potentially a better 3:50:39entry. And you could also even get a 3:50:41tighter stop-loss, right? So, let me 3:50:43kind of show you um an example of this.3:50:46I'm gonna kind of draw it out. Let's say 3:50:47you have like a nice little uptrend and 3:50:49you get a buy setup. And let's say this 3:50:51is the 15minut time frame. Maybe if you 3:50:54go to the five minute time frame right 3:50:57here, you get, you know, I don't know, a 3:51:00tighter stop where you can maybe put 3:51:02your stop here, entry there. But if you 3:51:05did it on the 15, your entry would be 3:51:06here, you know, does that make sense?3:51:08So, you're able to use a tighter stop um 3:51:10and as a result have a better reward to 3:51:13risk. This is not the best example. I'm 3:51:15kind of just drawing off the top of my 3:51:16head, but you guys get the point, right?3:51:18You see a setup, you can go to the 3:51:20smaller time frame to find an entry into 3:51:22that setup, find a stop-loss into that 3:51:25setup, and as a result, have a tighter 3:51:27spre,3:51:31right? Hopefully, this makes sense. So,3:51:32if sometimes if I see a really nice 3:51:34daily setup, I'll go to the hourly for 3:51:36my entry. I find a nice weekly setup,3:51:38I'll go to the daily for my entries. So,3:51:40you could play around with this. You 3:51:41could use multiple time frames and get 3:51:44creative with your entries. In summary,3:51:47guys, this concept is actually 3:51:48incredibly simple. Always look at 3:51:51multiple time frames. And this will 3:51:53allow you to filter out a lot of the 3:51:56lowquality trades that you're taking 3:51:58because I guarantee you're taking trades 3:52:00that look maybe amazing on the 15-minute 3:52:02time frame, but then when you look at 3:52:04the daily or the hourly, it doesn't look 3:52:06good at all. And maybe, you know, by 3:52:08using multiple time frames, that would 3:52:10save you from taking the trade and save 3:52:12you from losing money. Does that make 3:52:14sense? It's it's a really simple kind of 3:52:16concept, right? And these are the time 3:52:17frames that I use in my trading. And 3:52:20it's all about just using multiple time 3:52:22frame analysis and always looking for 3:52:24alignment. You always want, you know,3:52:26ideally you want to see this. You want 3:52:30most of your trades, 80% of your trades 3:52:32to look like this. Lower time frame is 3:52:34in sync. Current time frame is in sync.3:52:36Higher time frame is in sync. Everything 3:52:38looks good. There are multiple qualities 3:52:40that are converging together to make it 3:52:42a high probability setup. And you're 3:52:44probably going to make money most of the 3:52:46time trading this quality of a trade.3:52:48And the other setups you should be 3:52:50taking are like this where maybe the 3:52:52current time frame looks good, the 3:52:54higher time frame looks good, but the 3:52:55lower time frame isn't quite ready yet.3:52:57In that case, you could be patient and 3:52:58wait for it to set up. And 3:53:00realistically, guys, unless it's like a 3:53:03small scalp, you should never really be 3:53:05taking setups when the higher time frame 3:53:08is uh in conflict with the current time 3:53:10frame and the lower time frame. All 3:53:12right, today we are talking about 3:53:14support and resistance lines. And as 3:53:17traders, I'm sure you have heard plenty 3:53:20and seen plenty about support and 3:53:22resistance and how you could potentially 3:53:25use it to your advantage. However,3:53:28during this class, I'm going to be 3:53:30teaching you exactly how I use support 3:53:32and resistance and some of the theory 3:53:34that you need to understand before 3:53:36actually applying it to your trading.3:53:39Okay. So, what is actually support? What 3:53:42does it mean? So support can be defined 3:53:45as a price level or area or you could 3:53:48think of it as a price zone where a 3:53:51historical price action has shown that 3:53:54in that area there's way more demand 3:53:57than supply. So in other words in that 3:54:00area there are way more buyers than 3:54:03there are sellers. Okay? And when a 3:54:07stock actually hits support, you can 3:54:09either buy it or you can either look to,3:54:12you know, buy it or you can even look to 3:54:15short it, you know, using support. And 3:54:18we're going to be looking at both of 3:54:19those examples. So the key thing about 3:54:22support is that you and resistance, as a 3:54:25matter of fact, is that we have to make 3:54:28sure that price is actually retesting 3:54:31that support level. So looking at this,3:54:34we have one rally. Okay. And as we are 3:54:37dropping down, price actually retests 3:54:39this support and then rallies from there 3:54:43as well. Okay. So as soon as we have two 3:54:46tests of support where both you know 3:54:49both tests actually rallied from that 3:54:52support level then we can actually use 3:54:55and uh trust that support level. Okay.3:54:59So that's what we need. We need two 3:55:01tests of a support or resistance level 3:55:04before we can actually trust that it's 3:55:07actually serving as resistance or 3:55:09support. And this is an example of 3:55:12buying using support where a price level 3:55:14actually or price touches the support 3:55:16level you can look to purchase it.3:55:19Right? Obviously, this is a super basic 3:55:22understanding of it. You know, if it 3:55:24hits a support, we're going to buy.3:55:25there's obviously other uh strategies,3:55:28other factors that we're going to use as 3:55:30well um in order to justify actually 3:55:33buying it at support. But I think and I 3:55:36think the number one mistake people make 3:55:39using support and resistance levels is 3:55:41that they solely base their decisions,3:55:45their entries, their exits off support 3:55:47and resistance. And I think that's a 3:55:49mistake. I think using support, you 3:55:51know, you have to use support and 3:55:53resistance to your advantage, but that 3:55:55shouldn't be the only uh, you know,3:55:58indicators or the only factors in 3:56:00trading that you're looking at. And 3:56:01that's what traders do. They they tend 3:56:03to just use support and resistance to 3:56:05base their entries off of. You kind of 3:56:07have to use support and resistance with 3:56:10the other knowledge and skills that you 3:56:12possess in trading. And when you 3:56:14combine, you know, you know, the other 3:56:17strategies, you know, with support and 3:56:19resistance, that's when you can make uh,3:56:21you know, a lot more higher quality 3:56:23decisions. So, don't just use support 3:56:26and resistance. Use it alongside the 3:56:29other strategies you're going to learn 3:56:30in this course. Okay. So, this is one 3:56:33example where you could buy using 3:56:35support, where to retest the support,3:56:36you could look to purchase it. An 3:56:39[clears throat] example of actually 3:56:40shorting at support is let's say we have 3:56:42a you know huge drop and we start to 3:56:45kind of base kind of consolidate at this 3:56:48level. We can kind of think of the top 3:56:49of the base as resistance and the bottom 3:56:52of the base as support. And whenever,3:56:55you know, it actually breaks the support 3:56:57level, we could actually look to short 3:57:00it, right? And because breaking support 3:57:03suggests that there are now more sellers 3:57:05than buyers, right? Because during this 3:57:07support level, we could see that during,3:57:08you know, in that area, it keeps getting 3:57:11bought, right? Like once price touches 3:57:14that zone, it gets bought. But right 3:57:17when price decides that okay you know 3:57:19once it actually tears through that 3:57:21support it suggests that okay there are 3:57:23no more buyers left right the sellers 3:57:25are really dominating like there's way 3:57:27more sellers and buyers now in that zone 3:57:31so we're going to actually look to short 3:57:32it and make money as it continues to 3:57:35fall. Okay so you can either you know 3:57:38you could use support to either buy or 3:57:40short. In this case we're buying it when 3:57:42it retests the support. In this case,3:57:44we're shorting it when price uh, you 3:57:46know, goes through support. Okay? And 3:57:49I'm not saying that you should be buying 3:57:51whenever we do have a retest or shorting 3:57:53every time it breaks support. These are 3:57:55just two ways you can actually play 3:57:58support. Okay? And you might be 3:58:00thinking, okay, then how what you know 3:58:02when do we know when to short? How do we 3:58:04know when to buy? Well, that's when we 3:58:06combine the other strategies that we 3:58:07know in this course such as, you know,3:58:09such as the some of the skills we took 3:58:11from the breakout or breakdown or the 3:58:13buy setup or sell setup and the other 3:58:16knowledge that we've learned in this 3:58:18course, level two as well. Okay, so 3:58:21let's continue on and we're going to be 3:58:22talking about resistance. Okay, so 3:58:25resistance is a price level or area or 3:58:28zone where historical price action has 3:58:30indicated that there's actually way more 3:58:33supply than demand when price actually 3:58:36reaches that point. So in other words,3:58:38there are way more sellers 3:58:41at that point than buyers, right? And 3:58:45once again, you could either buy or 3:58:46short using resistance. So for example,3:58:49you could look to sell your position at 3:58:52resistance. Let's say you bought it down 3:58:53here. You could look to sell your, you 3:58:55know, you you bought it at support, you 3:58:58could look to sell it at resistance or 3:59:00let's say it hits a resistance level,3:59:02you could also look to short it, right?3:59:04And you have to make sure there's two 3:59:07tests, right? Price tested the 3:59:09resistance level twice before we can 3:59:12actually uh determine that it's uh it's 3:59:16a viable resistance level. Okay, hope 3:59:19that makes sense. And this is another 3:59:22way where we can, let's say we have a 3:59:24huge rally and then we begin to have a 3:59:25consolidation. The bottom of the 3:59:27consolidation could be looked at as 3:59:28support. The top of the consolidation 3:59:30could be looked at as resistance. And 3:59:32we're going to purchase it, right?3:59:34Purchase when price actually breaks the 3:59:38resistance level. Okay? Because it 3:59:40suggests that now there's way more 3:59:42buyers than sellers at that resistance 3:59:45point. Right? We had a lot of selling 3:59:47pressure when price hit that resistance 3:59:49before. But now that selling pressure 3:59:51has seemed to disappear. It's no longer 3:59:53there. And that's when we actually buy 3:59:56it because now we have confirmation that 3:59:58there are actually way more buyers than 4:00:00sellers. And you can kind of pair this 4:00:03right away using uh the breakout method.4:00:06Right? This is a breakout. We are 4:00:08playing above the consolidation. So you 4:00:10can kind of see how res, you know,4:00:11support and resistance can help you with 4:00:14your breakouts and breakdowns and how 4:00:16they kind of relate to one another.4:00:18Okay. Now looking at another example 4:00:22when let's say we actually have an 4:00:23uptrend,4:00:25right? So let's say we have a rally and 4:00:29then we have a pullback. That high the 4:00:32previous rally high right here is now 4:00:34going to serve as resistance. Right?4:00:38Okay. So now this is resistance.4:00:41Okay. And then let's say we you know 4:00:44from there we also continue we have a 4:00:46pullback right and then we break the 4:00:47resistance we continue to rally. Okay.4:00:50And we begin to actually pull back 4:00:52again. What we want to see is we want to 4:00:55see this prior resistance from here 4:00:58right this prior resistance now turn 4:01:01into this pullback's support. Right? So 4:01:05here the resistance level right this 4:01:07resistance level from this high is now 4:01:09turning into the support for this low 4:01:13right so this resistance is becoming 4:01:14this support now so this is really what 4:01:17we kind of want to see during um during 4:01:20uptrends okay so exactly like I 4:01:24mentioned this is this resistance level 4:01:25it turns into this pullback's support 4:01:29and during these retracements right like 4:01:31this pullback is technically called a 4:01:33retracement 4:01:35We want it to retrace 40 to 60% of the 4:01:39prior rally. Right? So we have this 4:01:40rally. We want this retracement to be 4:01:43you know we want it to retrace 40 to 60%4:01:47of this rally which it has. I mean this 4:01:49kind of retraced around I would say 4:01:50probably probably right around 50%.4:01:53Okay. And we want to see that 4:01:55retracement be between 40 to 60%. We 4:01:57don't want to see deep retracements. We 4:01:59also don't want to see super shallow 4:02:01retracements. Okay. And we kind of 4:02:03talked about that during the buy setup 4:02:04classes. Okay. And right and the whole 4:02:08idea of this turning you know this 4:02:10resistance now turning into support is 4:02:12that we want price to actually retrace 4:02:15to the prior resistance level which is 4:02:18now being considered as support. Right?4:02:21We want this res we want price to 4:02:23retrace to this resistance. And once it 4:02:26does retrace and respects that 4:02:28resistance it be it becomes support.4:02:30Same thing here. We have a rally, right?4:02:33We have this prior resistance and we 4:02:34have we retrace back to that prior 4:02:37resistance now. Therefore, making its 4:02:39support and we rally again. So, this is 4:02:42something we want to see this um during 4:02:45uptrends or downtrends, right? We want 4:02:47to see the prior we want to see 4:02:49retracements that retrace to the prior 4:02:52resistance.4:02:54Okay? Just like and we're going to 4:02:56examine a downtrend as well, right?4:02:58where we have, you know, we have a drop,4:03:01then we have a we kind of have a 4:03:03retracement here, a rally higher. And 4:03:06this support level,4:03:08right? This support level right here is 4:03:11now becoming, you know, this 4:03:14retracement's 4:03:16uh resistance level. So this support 4:03:18here right is now becoming resistance 4:03:21for when this stock you know after this 4:03:23drop it's going to become resistance for 4:03:27um for this retracement or this rally 4:03:30higher right so it's the same thing this 4:03:32support level becomes resistance here 4:03:34and we want price to retrace to the 4:03:37prior support level right this was the 4:03:39prior support level we want it to 4:03:40retrace to the prior support level here 4:03:43and now it will it's turning into 4:03:45resistance we also So like I said just 4:03:48like uh same thing we want a 40 to 60%4:03:50retracement right this this is a drop we 4:03:53want it to retrace 40 to 60% of this 4:03:56drop right straight to this new 4:03:59resistance level which was the prior 4:04:01support okay and it's basically the same 4:04:04idea this is what we want to see during 4:04:06a downtrend we want to see retracements 4:04:07to the prior support which is defined by 4:04:11you know this low right same thing here 4:04:14we have a drop right and then the 4:04:16retracement ment and the retracement it 4:04:19it goes right into the prior support 4:04:22level which is now resistance. Okay,4:04:24hope that makes sense and we are 4:04:27actually going to head into the 4:04:28conclusion here. So support and 4:04:30resistance is a very important tool and 4:04:33resource that you can use to benefit 4:04:36your trading, right? And what we should 4:04:39do is combine support and resistance 4:04:42with other strategies with the other 4:04:46information that we are learning in this 4:04:48course. And a huge mistake traders make 4:04:51is that they solely trade and rely 4:04:54support and resistance levels, right?4:04:56They they only use them, which is 4:04:58foolish, right? Support and resistance 4:05:00is incredibly useful when we actually 4:05:02pair it with other strategies. That's 4:05:05the key thing. That's the key here.4:05:07We're pairing it with other strategies.4:05:09We're not just using it by itself. Okay?4:05:12We should not be trading anything in a 4:05:15vacuum. We shouldn't be using one piece 4:05:17of information. We should be using a 4:05:19collection of different factors,4:05:21different strategies that we're learning 4:05:23in this course. And once you know using 4:05:26that collection of strategies, we're 4:05:28able to make a lot more higher quality 4:05:30decisions, a lot more higher quality 4:05:32trades. So, please use support and 4:05:34resistance to your advantage, but don't 4:05:36solely use it.4:05:38And you should be right combining 4:05:40support and resistance knowledge with 4:05:41other strategies for the best results.4:05:43And I'm going to include a video next 4:05:46actually looking at stocks in practice,4:05:48looking at real stocks, drawing support 4:05:50and resistance lines, and kind of trying 4:05:53to analyze what we learned during this 4:05:56presentation in theory. We're going to 4:05:57try to bring it into practical 4:05:59knowledge, okay? and into you know into 4:06:02um you know more practical application 4:06:05of support resistance. So that's in the 4:06:08next video. Okay and I will see you guys 4:06:11in the next class. Thank you. All 4:06:13righty. Let's dive in into more ways we 4:06:16could actually use support and 4:06:18resistance to our advantage and we're 4:06:20going to kind of get into the more 4:06:22practical elements of using support and 4:06:25resistance. So I've made a few examples 4:06:28in the slides and in the next class I'm 4:06:32actually going to be looking at real 4:06:34stocks and showing you how you could 4:06:36apply some of these support and 4:06:39resistance um you know teachings or this 4:06:42education that you've been seeing how we 4:06:43could actually apply it into real life 4:06:46charts. Okay. So key points, you know,4:06:49and specifically for, you know,4:06:51determining targets. In this case, we're 4:06:53going to be talking about how to use 4:06:54support and resistance to determine 4:06:55targets. Some key points is that, you 4:06:58know, determining targets and 4:07:00determining, you know, where you think a 4:07:02stock is going to rally to or where you 4:07:04think a stock is going to drop to. It's 4:07:07based completely off support and 4:07:09resistance, right? And if you're playing 4:07:12long, right? You're you're buying a 4:07:15stock. What you're going to want to do 4:07:17is check the next resistance level and 4:07:21use that as a potential target. Okay?4:07:24And if you're playing short, you're 4:07:26going to want to check the next support 4:07:28level and use that as a potential 4:07:32target. Right? So, our targets are 4:07:35simply based off looking at support and 4:07:38resistance. All right?4:07:40And what you know what you're going to 4:07:42want to really do is look at several 4:07:44different time frames, right? Because 4:07:46let's say you're trading off the five 4:07:48minute chart and you don't see any 4:07:51resistance above. Let's say you're 4:07:53playing long, right? And you don't see 4:07:55any resistance above on the five-minute 4:07:57chart. Well, what you should be doing is 4:08:00looking to high, you know, looking at 4:08:01the higher time frames and then seeing 4:08:04if there's resistance because you might 4:08:06not see resistance on the five minute 4:08:08chart, but if you go to, let's say, the 4:08:10hourly or the daily chart, you might end 4:08:13up seeing resistance and that's going to 4:08:17affect whether you're actually going to 4:08:20take that trade or not. Okay? So, like I 4:08:23said, we're [clears throat] going to be 4:08:24looking at higher time frames to check 4:08:26if there is support and resistance above 4:08:28or below. And you're going to in 4:08:31general, you're going to want to, you 4:08:32know, look at the higher time frame. So,4:08:35specifically the daily chart and the 4:08:38hourly chart. I wrote daily chart here,4:08:41but you could also check the hourly,4:08:43right? Um, so always check the daily 4:08:45chart first, right? Or you could check 4:08:47the hourly first and then the daily.4:08:49It's really kind of up to you. Um, but 4:08:52you're going to want to check the daily 4:08:53chart and determine if there's enough 4:08:56room for the [clears throat] stock to 4:08:59rally or drop to the next resistance or 4:09:01support level. Ultimately, when we're 4:09:04let's say we find a trade that we like 4:09:06and we're trying to figure out targets 4:09:08and we're looking, you know, let's say 4:09:10we're playing long and we're trying to 4:09:11figure out the next resistance level and 4:09:13so we take a look at the daily or hourly 4:09:16chart and we determine what the next 4:09:18resistance level is. We have to then ask 4:09:21ourselves based on, you know, the size 4:09:24of our stop-loss or the size of our 4:09:27risk, is the trade worth it? Is there 4:09:30actually that much room for the stock to 4:09:33go up before hitting resistance? Right?4:09:37Or is resistance literally directly 4:09:39above, right? And if resistance is 4:09:43directly above, well, that's when the 4:09:45stock, you know, assuming it hits 4:09:47resistance, that's when it's going to 4:09:48have a tough time, you know, continuing 4:09:51higher, right? Because if it's hitting 4:09:52resistance, you can think of that as 4:09:54kind of like a ceiling, right, for the 4:09:56stock. So, or if it's hitting support,4:09:59that's kind of like a floor for the 4:10:00stock. So, it's going to need, you know,4:10:03additional, I guess you can call it 4:10:05effort or a lot more additional buyers 4:10:07for it to actually rip through 4:10:09resistance, right? So, our goal is to 4:10:12make sure there's an ample enough uh 4:10:15room before the stock actually hits 4:10:18resistance, right? So, before there's 4:10:20actually enough uh you know, room for it 4:10:23to go up for us to make a profit before 4:10:25it hits our target or resistance. So,4:10:29just to reiterate, if you're playing 4:10:31long and you see that there's a 4:10:32resistance level directly above, you 4:10:34should reconsider taking that trade,4:10:36right? Or, you know, maybe you know,4:10:39rethink the trade a little bit because 4:10:41if there's resistance right above,4:10:43right, directly above, there's really 4:10:45not that much room for the stock to go 4:10:47up before it hits it, right? And that's 4:10:49going to, you know, that's going to uh 4:10:51decrease your reward to risk. And if 4:10:54you're playing short and you see that 4:10:55there's a support level directly below,4:10:57well, you're going to re want to 4:10:58reconsider taking the trade because if 4:11:01there's support directly below and 4:11:03there's not that much room for the stock 4:11:05to fall until it hits support, the your 4:11:09reward to risk might be affected. And 4:11:12this of course all depends on the actual 4:11:14uh what your actual stop-loss is. Okay?4:11:17And I kind of I went a lot more into 4:11:20detail with this in the risk management 4:11:22video. So definitely go back to that if 4:11:24you're having some confusion around 4:11:26this. But and another something else I 4:11:29want to talk about is what what what I 4:11:31want you guys to do is check for over 4:11:33overlapping candles. Overlapping candles 4:11:37or you can call it maybe a consolidation 4:11:39or a base that represents resistance or 4:11:42support. So let's look at this example.4:11:44Let's say we have a stock. drops, then 4:11:46it begins to consolidate.4:11:48And after this consolidation, it 4:11:50continues lower, right? And let's say 4:11:53here, you know, we're looking at 4:11:54potentially playing this long. This is 4:11:57just an example, right? I'm not I'm not 4:12:00saying it only applies to this 4:12:01situation. This is just an example. You 4:12:05know, we're playing long from the bottom 4:12:06and we wish to determine the next 4:12:07resistance level, right? We're playing 4:12:09long and and we're asking ourselves,4:12:10what's the next resistance? Well, we're 4:12:14going to look at the next area of over 4:12:16overlapping candles. And these 4:12:18overlapping candles, they can represent 4:12:21support or resistance because it kind of 4:12:23represents an area of uncertainty,4:12:25right? Where we have a drop and we have 4:12:27a kind of a we kind of have a 4:12:28consolidation. Some people played ended 4:12:30up playing long here. Some people played 4:12:32short and you know, let's say someone 4:12:35who played long, they ended up getting 4:12:37stuck in the position and ends up going 4:12:39against them. as soon as the stock ends 4:12:42up, you know, reaching back to their 4:12:44entry point because remember if they're 4:12:45playing long from here and they're and 4:12:47then it ends up dropping, they're down 4:12:48on the position. Let's say they don't 4:12:50exit and the stock goes right back up.4:12:53Well, you know, they might end up 4:12:54looking to get out of their positions,4:12:57break even, and there's a lot of 4:12:58different uh details, a lot of different 4:13:00there's a lot of uncertainty that occurs 4:13:02during these consolidations. So, that's 4:13:04why we use it as support or resistance.4:13:07So when looking at something like this,4:13:10if we're playing long here, we're 4:13:11looking at our next target is the next 4:13:13resistance, which is these overlapping 4:13:15candles. So this is just an example of,4:13:18you know, what you what uh how to 4:13:20determine if something is support 4:13:21resistance. It's check for overlapping 4:13:24candles. Okay, so this is definitely one 4:13:26way to look at resistance or support.4:13:29This is another example here where,4:13:31[clears throat] you know, I kind of 4:13:32talked about assessing your risk using 4:13:35support and resistance. Well, this is a 4:13:37really good example where we have a 4:13:38consolidation, right? We have a bunch of 4:13:40overlapping candles, then we get a 4:13:42tremendous drop, then we get a rally,4:13:45and all of a sudden now we have a 4:13:46breakout or, you know, a base breakout 4:13:49potential for a base breakout. Uh, and 4:13:51our entry is over the base. Our stop 4:13:53loss is under it. And where our next 4:13:56target, well, it's going to be the next 4:13:58resistance area, which are these 4:14:00overlapping candles. Okay? So this is 4:14:03going to be our first target, right? So 4:14:06what we have to assess when looking at a 4:14:08trade like this is okay, what's our 4:14:11entry? What's our stop loss? Right? Then 4:14:14determine the size of the stop, which we 4:14:18would, you know, subtract the stop loss 4:14:20from the entry point, right? So let's 4:14:22say our entry is $4. Our stop loss is 4:14:253.90. That's a 10 cent stop. And let's 4:14:29say um right so our entry is $4. Our 4:14:32stop loss is 390. Let's say our target 4:14:35is um let's say 44 410 right this 4:14:40resistance starts at 410. Well our entry 4:14:44is at four. Our stop loss at 3 is at 390 4:14:47and our res the next target the first 4:14:48the next resistance area our first 4:14:50target is at 410. Well that point we're 4:14:53risking 10 cents to make 10 cents right?4:14:57So obviously that wouldn't be worth it 4:14:59because you know after watching the risk 4:15:02management video you guys should know 4:15:03that our risk should be 2:1 right so 4:15:06let's say our entries at $4 our stop 4:15:08loss at 390 that's a 10 cent stop we 4:15:12want to make sure that we that there's 4:15:14at least 20 cents of room before it hits 4:15:18the first target or the first resistance 4:15:20area. Okay, I hope that makes sense.4:15:22Like I said, watch the risk management 4:15:24video if you're still kind of confused 4:15:25on that. But now that we know how to 4:15:28determine our targets, right? How to 4:15:30determine what the next resistance area 4:15:32is, we can now h, you know, um, manage 4:15:35our risk a little bit better, where 4:15:37we're trying to assess, okay, what are 4:15:39we risking versus what's our potential 4:15:41reward. And our potential reward is 4:15:43well, however much room there is between 4:15:46our target, right, or resistance area 4:15:49from where our entry is.4:15:52And you know, I just want to reiterate 4:15:54here, this is a base breakout, right? We 4:15:56play long over the base and we place our 4:15:58stop loss under the base. So long over 4:15:59the base, stop loss under the base. The 4:16:01target is the next resistance level,4:16:03which are the overlapping candles above.4:16:06We must consider whether our target is 4:16:08worth the risk of taking on the trade.4:16:11We just talked about it. Assessing the 4:16:12stop-loss, assessing where our targets 4:16:14are. And refer to the risk management 4:16:16video. We want the potential of making 4:16:182:1 return uh or 2:1 reward on our risk.4:16:22Okay, so I hope this makes sense. Uh 4:16:24this is just a an example of how we 4:16:26could apply resistance and support where 4:16:29we're we're looking at the next 4:16:30resistance level for our target and then 4:16:32we're determining whether the trade is 4:16:33actually worth it dependent on our 4:16:36actual entry and stop-loss. Okay. And 4:16:39another uh thing that I wanted to 4:16:41another topic I wanted to discuss is if 4:16:43a stock is rallying into all-time highs,4:16:47there is no resistance to the left,4:16:49right? It's into all-time highs. The 4:16:51stock has never been at that point 4:16:52before because it's like I said, it's 4:16:54all-time highs. So, there is no 4:16:56resistance to base our targets off of.4:16:59So, we cannot accurately accurately 4:17:02determine our targets. Just like if a 4:17:05stock is dropping into all-time lows,4:17:06there's no support below and to the 4:17:09left, there is no support because the 4:17:11stock has never been at that price 4:17:13before. So therefore, we cannot 4:17:15accurately determine our targets, right?4:17:18So if it's an if the stock is in is into 4:17:21all-time highs or all-time lows, we're 4:17:23not going to be able to determine 4:17:25targets that well just because there is 4:17:27no support or resistance to base that 4:17:30off of, right? And as a general rule,4:17:34this is really going to help you 4:17:36understand where there is support 4:17:39resistance is always look to the 4:17:42immediate left for support and 4:17:44resistance. And that's a key word. Look 4:17:45to the immediate left,4:17:48right? And this, you know, this this is 4:17:51one of those things that you it's all 4:17:53about practice. It's all about actually 4:17:55looking at some charts and looking at 4:17:57support and resistance. But like I said,4:17:59we're going to be looking at the 4:18:00immediate left for support and 4:18:02resistance. And what I want to do is 4:18:05actually go through a bunch of real life 4:18:08charts and, you know, give you guys some 4:18:11examples of all of the theory that we've 4:18:14learned about support and resistance.4:18:15You know, looking for overlapping 4:18:17candles, looking for targets, trying to 4:18:20look at, you know, trying to assess risk 4:18:22to reward using support resistance,4:18:24right? looking into some all-time highs 4:18:25or lows and and like and also looking to 4:18:29the immediate left when um you know when 4:18:33analyzing support and resistance. So the 4:18:35next class I'm going to be looking at 4:18:37specific stocks and we're just I'm just 4:18:39going to analyze draw some support and 4:18:41resistance lines and show you some of 4:18:44the theory that we have learned so far.4:18:46See you in the next class.4:18:48All right, guys. We're going to go over 4:18:50some real life examples, some real life 4:18:54charts, showing you guys how to apply 4:18:57some of the [clears throat]4:18:58support and resistance theory and 4:19:01knowledge that you've just obtained.4:19:03Okay? And we're going to be first 4:19:05looking at Facebook. I kind of picked 4:19:07random stocks. So, um, these weren't 4:19:11pre-selected. I kind of just found a 4:19:13list of random stocks that we're going 4:19:15to go over here today. And um just one 4:19:17example looking at this. Let's say 4:19:19you're looking at this and you know 4:19:22you're looking at potentially taking a 4:19:24short, right? Let's say it dropped where 4:19:27you know we had a big drop here. It's 4:19:28kind of consolidating here. And let's 4:19:30say I'm not saying this is a great short 4:19:32opportunity, but let's say you intend to 4:19:34play this short. You want to play it 4:19:36short under the consolidation, right? So 4:19:38you short it when it breaks the 4:19:40consolidation and you want to put your 4:19:42stop loss, let's say, above it, just 4:19:43like that. So this is just an example um 4:19:47just out of just to show you um how to 4:19:49apply some of the theory. So let's say 4:19:51that's your this is your entry. This is 4:19:53your stop loss. Okay? And our goal is to 4:19:57assess uh you know what's our target?4:20:00What's the next support level because 4:20:02remember we're shorting it. So like I 4:20:04said the general rule is look to the 4:20:06left right and in this case when you see 4:20:10something you know we're on the daily 4:20:11chart here. If you're seeing the stock 4:20:12and there's nothing, absolutely nothing 4:20:14to the left, what you're going to want 4:20:16to do is go to the higher time frame.4:20:19So, we're going to go to the weekly 4:20:20chart now. Okay. So, now all of a 4:20:23sudden, we actually have a little bit 4:20:24more clarity on where our next support 4:20:27level is. Like on the daily chart, when 4:20:30we looked at it, well, there was nothing 4:20:31to the left, right? We can keep 4:20:32scrolling for a long time and we might 4:20:34not get anywhere with it. But we go to 4:20:37the weekly chart, we can immediately 4:20:39see, you know, what's to the left,4:20:41right? So, we're taking a short position 4:20:42here, right? And Facebook does look 4:20:44lower. We the declining 20-day moving 4:20:46average, right? We have a huge drop. It 4:20:49does look lower. However, how you know 4:20:52when's where's the next support? How 4:20:54much lower does it look? Well, looking 4:20:57at it, our next support level is right 4:20:59around here. You know, you want to say 4:21:01this entire area, right? So you want to 4:21:04say this is our next support area,4:21:06right? I don't want to I don't I don't 4:21:08want to say it's one line, but you know 4:21:10this general area, right? So let's let's 4:21:12kind of draw it maybe here. Okay. So 4:21:16this is our next support level. All 4:21:18right. Well, let's see if the trade is 4:21:20actually worth it, right? So this is our 4:21:23next support and this is our stop loss.4:21:25This is our entry. So now we're going to 4:21:27do some calculations. We're going to 4:21:28see, okay, what's our stop? We're going 4:21:30to subtract our entry from the stop 4:21:31loss. see what our actual stop is, see 4:21:34what our reward is, and we're going to 4:21:36determine if the trade is actually worth 4:21:38it. Right? So, that that's a really good 4:21:40example of uh, you know, try how to 4:21:43figure out whether it's actually worth 4:21:45uh, you know, the the risk of taking the 4:21:47trade. So, this is our next support 4:21:49level. And if we look to the left again,4:21:52our next support level is right here,4:21:54right? So, this is our first support 4:21:56level. Our next one we're going to look 4:21:58to the left is directly above below is 4:22:00right there. So, that's a good way of 4:22:02figuring out where support is. We're 4:22:04going to, you know, and when in doubt,4:22:05when you don't see support or resistance 4:22:08to the left, like in this case, go to 4:22:10the higher time frame, go to the weekly 4:22:12chart, or if you're on the five minute 4:22:14chart, go to the 15-minute chart, or go 4:22:16to the or go to the hourly or daily 4:22:18chart in order to analyze what the 4:22:20resistance or support is. Okay, so 4:22:22that's a great example.4:22:25Um, another uh example here. Let's see 4:22:27if we're looking at this uptrend, right?4:22:30We we kind of talked about in the first 4:22:32resistance video how um how you know 4:22:36resistance and support is used during 4:22:38uptrends or downtrends where our you 4:22:41know previous resistance right becomes 4:22:43the new support right so let's let's 4:22:45look at an example here uh you know we 4:22:48we could uh I guess we could actually 4:22:50use this as an example right here right 4:22:52we have a consolidation right here we 4:22:54have a rally consolidation so this is 4:22:56our resistance right this level right 4:22:58here, right? Cuz we had it it retested 4:23:01that resistance basically almost three 4:23:04times and the third time it actually 4:23:06went through it. But notice how when we 4:23:08actually had a pullback, it pulled back 4:23:11maybe not exactly to this resistance,4:23:14right? But around in that area. So this 4:23:16is a great example of resistance, you 4:23:19know, now becoming support on the 4:23:22pullback. And that's what we want to 4:23:24see. We want to see the pullback, you 4:23:26know, actually pull back to the previous 4:23:28resistance, which was right here. So,4:23:30this is a great example, right? Um,4:23:32let's look at another example here where 4:23:35Oh, whoops. Another example here where 4:23:37our our resistance 4:23:40is actually right here. Right. Oh, sorry 4:23:44for the text, guys, but our resistance 4:23:47is right there. and our pullback 4:23:50occurred to you know we we had the rally 4:23:54and it pulled back to the previous 4:23:55resistance and now that is the new 4:23:59support. So this previous resistance 4:24:02became the new support for the stock.4:24:05Okay, I hope that makes sense and this 4:24:07relates to the first video where we 4:24:09talked about you know resistance 4:24:10becoming support. So these are two 4:24:12pretty pretty good examples. But I think 4:24:15actually this this is even better 4:24:16example right here we have a rally then 4:24:19a pullback right notice how the pullback 4:24:22it pulled back to this previous support 4:24:24this resistance area. So this was 4:24:26resistance and now it became support 4:24:27here. Right? This is now the new 4:24:30resistance and this new resistance.4:24:33Notice how the stock pulled back to this 4:24:36resistance now becoming support. Right?4:24:39And if this sounds a little confusing,4:24:40go back to the first resistance video 4:24:43and that's where I really talk about it 4:24:45uh more. You know, it's it's a more of a 4:24:47theoretical approach, but it's it's 4:24:48definitely I give a a bit more detail.4:24:51But the general idea is is that the 4:24:53previous resistance level, right? Like 4:24:55this previous resistance level becomes 4:24:57the new support when the stock actually 4:24:59pulls back. So it pulls back to the 4:25:01prior resistance and that now becomes 4:25:03support. Okay, so those are two good 4:25:06examples of that. Um, another example 4:25:10that I want to just show you here is 4:25:11this kind of relates more to the 200 day 4:25:13moving average, but um,4:25:16this uh, 200 day moving average right 4:25:19here is acting as support, right? We 4:25:22have the stock pulled back here,4:25:25retested it, that's one. Then it 4:25:27retested here and rallied. That's two.4:25:30And again, it retested actually here. So 4:25:32now this has been a proven support 4:25:34level. So, this is a really good example 4:25:37how you can use the to the 200 day 4:25:38moving average as support to your 4:25:42advantage. Okay.4:25:44And uh I guess we could talk about one 4:25:47more thing. Let's say all of a sudden uh 4:25:50we're looking at let's say we're going 4:25:53to reverse back in time and we're here,4:25:56right? Let's say this drop hasn't this 4:25:59drop right here hasn't occurred yet and 4:26:01we're here in time. If you're looking at 4:26:03this and thinking, "Okay, do I want to 4:26:05play it long?" Well, either way, you're 4:26:07not going to play it long because we 4:26:08have a declining 20-day moving average.4:26:10It's a downtrend. But let's say you 4:26:12decide to play it short and you want to 4:26:14short it here. Well, you know, if you're 4:26:16going to you're going to be looking 4:26:18you're right here. You're going to be 4:26:18looking directly to your left, which is 4:26:20these candles and then these candles,4:26:23right? So, right away, if you're trying 4:26:25to short it from here, we have support 4:26:27here and here and here, right? We have a 4:26:30support level here. We also have support 4:26:33down here. So, you know, if 4:26:35[clears throat] you're looking at this 4:26:36and you're thinking, okay, do I want to 4:26:38play it short? Well, you got to ask 4:26:39yourself, is there a lot of support 4:26:41below? And in this case, there was a lot 4:26:44of support below. You had all these 4:26:45candles, then plus you had these 4:26:47candles, right? And then you had this 4:26:48low. So, the answer is, yeah, there was 4:26:50a lot of support. And you would now 4:26:53consider that you're like, okay, there's 4:26:55tons of support below. Do I really want 4:26:58to short it? you know, am I that 4:26:59confident that's actually going to go 4:27:01through the support? Okay, let's look at 4:27:05another stock real quick. We can look at 4:27:07PLTR and kind of uh look at what's going 4:27:10on 4:27:11in this case. You know, if we're if 4:27:12we're looking let's say let's say for 4:27:14example, we actually want to short this,4:27:15right? Because the 20-day moving average 4:27:17is above if the 20-day moving average 4:27:19was to theoretically start to curl over 4:27:21price, we could actually probably look 4:27:23for a short position in theory, right?4:27:25Not saying we should do that, but you 4:27:28can. Now, if I'm looking at this, right,4:27:33I'm looking directly to my left. We have 4:27:35this entire support, right? Cuz 4:27:38remember, we look directly to the left.4:27:39If we're here, we're going to look to 4:27:40the left. We have this entire support,4:27:43right? Not only that, but we have this 4:27:46low, right? So, we have two kind of 4:27:48support levels right in front of us,4:27:50right? Let's say, let's say it actually 4:27:52breaks through the support, right? It 4:27:53ends up going lower. it it actually 4:27:55breaks through this entire support 4:27:56level. Our next support is right there.4:27:59So, the question is, does it really have 4:28:00that much that much room to drop before 4:28:04it hits support, right? And that's 4:28:07something that you're going to have to 4:28:08figure out like does it have enough room 4:28:10like if you put your stop loss here,4:28:11entry here, well, it doesn't really make 4:28:13sense from a reward to risk standpoint 4:28:16because are the the next support levels 4:28:18directly below directly below. So, you 4:28:21would probably be a little more hesitant 4:28:23on actually taking this trade because of 4:28:25that because support is right below 4:28:27because, you know, and let's say it hits 4:28:29support. Well, the likelihood that it's 4:28:31just going to rip through the support 4:28:32level and continue lower is kind of low.4:28:34It might, you know, go down to support 4:28:36and then bounce and stuff like that,4:28:38maybe rally a bit off support. We want 4:28:41to have, you know, let's say our support 4:28:43level is actually down here instead.4:28:45then we would have ample enough room for 4:28:46the stock to drop before it's actually 4:28:49hitting that support level. Okay, hope 4:28:51that makes sense. I hope that makes 4:28:52sense.4:28:54This is a good example right here of we 4:28:56have a a we have a drop. Then this is a 4:29:00clear support level. You could see how 4:29:01much it's retesting and bouncing. So,4:29:03this is a support level and as soon as 4:29:05it broke this support level, well, this 4:29:07is our short position, right? We short 4:29:09it right there. as soon as it breaks 4:29:11this support because it's kind of like a 4:29:13consolidation here, right? We probably 4:29:15put our stop loss around right here,4:29:17right? And you could see that ended up 4:29:19really dropping.4:29:21But if we're looking if we're in this 4:29:23area, right, and we're looking at uh 4:29:26like let's say we're we're looking to 4:29:27short it here, maybe actually wouldn't 4:29:29have been the best position because we 4:29:31did have this support to consider,4:29:34right? Because if we're looking at this,4:29:37right, we have to look directly to the 4:29:38left at the next support level. The next 4:29:40support level is right here. Luckily, it 4:29:42ended up actually completely breaking 4:29:45through it. But still, that's how we're 4:29:47going to be looking at support 4:29:49resistance. Look directly to your left 4:29:51and look at the next support or 4:29:53resistance level. Okay, let's uh see if 4:29:57there's any other examples that I can 4:29:59make from here. Uh, not really. We can 4:30:03move on to the next stock. We'll 4:30:04probably do one or two more here. Right.4:30:07Um I think this is okay. This is 4:30:09interesting. Well, we can we can kind of 4:30:10go through this right here. If we're 4:30:12looking at right, let's say we're 4:30:14looking at this point right here and 4:30:16we're looking to play long, right? Well,4:30:19if we're looking to play long, our next 4:30:22support level 4:30:24is going to be right there, right?4:30:26Because if we're buying it down here,4:30:27let's say it's a buy setup, we're buying 4:30:29it here. Our next support level is the 4:30:31previous highs, right? So that's our 4:30:33previous resistance. I'm sorry I keep 4:30:35saying support. This the resistance 4:30:36level. So the previous we're going to 4:30:38look to the previous resistance level 4:30:40which is right here. That's going to be 4:30:41our target number one. Right after that 4:30:44we're going to look at the next 4:30:45resistance which is basically you know 4:30:48we're going to look to the left. It's 4:30:50this next high. So this is our next 4:30:52resistance level. And as you can see the 4:30:53stock actually went up to that 4:30:55resistance level and ended up dropping 4:30:58down. Okay. So, I hope this I hope this 4:31:01is starting to make sense and and we 4:31:03could you're you're beginning to 4:31:04understand how we could apply support 4:31:07and resistance, right? So, if we're 4:31:08playing it long from here, our our we're 4:31:10going to look to the left. This is our 4:31:13first resistance level. The next one,4:31:15we're going to look even more to the 4:31:16left. Okay, this is our next resistance 4:31:17level. And it ended up rallying straight 4:31:19to that resistance and dropping. So,4:31:21that would have been a perfect target.4:31:24Okay, so in general, guys, um I'm not 4:31:26going to go through all of these. You 4:31:28guys get the idea. It's we're going to 4:31:30be always look to the left. Always look 4:31:34to the left and to to specifically the 4:31:36immediate left to check for support and 4:31:39resistance. And you're going to be using 4:31:40it as targets, right? If there's a lot 4:31:43of support below and you're shorting it,4:31:46maybe reconsider the trade, right? You 4:31:49don't want there to be tons of support 4:31:51below because the likelihood of that 4:31:52trade actually working is a lot lower.4:31:54Just like if you're playing long, right?4:31:57You don't want there to be tons of 4:31:58resistance above because it's going to 4:32:00be, you know, the likelihood of the 4:32:02trade actually working out in your favor 4:32:03is a lot lower, okay? Because there's 4:32:05tons of resistance above. Resistance 4:32:07resistance is going to stop the stock.4:32:10It's going to stand in the way of the 4:32:11stock really continuing higher, right?4:32:13And that's why I personally like trades 4:32:17that are going into all-time highs,4:32:20right? So, let's say uh we have a um 4:32:24stock that, you know, it pulled back 4:32:27Right.4:32:29I'll kind of paint it out like this.4:32:33Okay. Boom. Let's say we have a rally,4:32:35then a pullback, and then another rally,4:32:37and it's basing at resistance at the 4:32:40all-time highs. That is extremely 4:32:44bullish, right? So, I'm going to 4:32:45actually write that. This is going to be 4:32:46kind of another quick little lesson 4:32:48here. A consolid base at the all-time 4:32:53highs 4:32:55is a very bullish 4:33:01quality. Okay. And similarly, a base 4:33:07at the alltime lows is a very bearish 4:33:13quality.4:33:15Okay. So, let's say, like I said, this 4:33:18is here. I'll I'll even write it. I'll 4:33:20even write it here.4:33:24Boom.4:33:26Right. So, let's say we have a rally,4:33:29then a pullback, and then we have 4:33:30another rally, and it's basing at the 4:33:32all-time highs. That is very bullish,4:33:36and we like that. We want to see that.4:33:39And the reason it's very alluring is 4:33:40that let's say it actually ends up 4:33:42breaking out.4:33:44Let's say it breaks out. Well, there is 4:33:46no resistance to the left, meaning this 4:33:49has unlimited room to go higher.4:33:53Excuse me. And that's the great thing.4:33:55There is no resistance to stop the stock 4:33:57from actually continuing higher, right?4:34:00The since there's no resistance, the 4:34:02stock could easily continue higher as 4:34:03much as it wants. Okay? Just like in it,4:34:07it it work the same way if it was the 4:34:09opposite. If it was a base at the 4:34:10all-time low and it started to break 4:34:13down under the base, there's no support 4:34:15below. So, it in theory has unlimited 4:34:17room to continue lower, right? And we 4:34:20and that's that's a great quality 4:34:21because since there's no support below,4:34:23I mean, on the one hand, we can't really 4:34:25pick targets all that well, but there's 4:34:27no support to, you know, stop it from 4:34:29going lower, which is great if we're 4:34:31shorting it. Okay, hope this all makes 4:34:34sense. I'm going to try to find maybe an 4:34:35example here. Uh, we could find an 4:34:38example here. Let me look.4:34:45H maybe. Let's see. Let's look at this 4:34:47one. No.4:34:52Okay, this is actually a nice a fine 4:34:54example. We could look at Hood for 4:34:56example. Okay, let's say we were 4:34:58shorting Hood under this base just as an 4:35:02example. Not saying I would do this, but 4:35:03let's say that's what you were going to 4:35:04do, right?4:35:06Well, there's no support at all under 4:35:10this base. There's nothing to the left 4:35:12of it. So, this in theory, there's no 4:35:14support to base our targets off of, but 4:35:16there's no support that's going to stop 4:35:18it from continuing lower. So, this can 4:35:20in theory go lower all the way to zero 4:35:22if it wanted to. Obviously, it's Robin 4:35:24Hood. It's probably not going to do 4:35:25that, but you guys get my point. There's 4:35:27no support stopping the stock from 4:35:29dropping, which is great if we're 4:35:31shorting it. Or just like the opposite,4:35:33if we're playing long and there's no,4:35:35you know, and we're into all-time highs 4:35:36and there's no resistance above, well,4:35:39there's no resistance that's going to 4:35:41stop the stock from continuing higher.4:35:43So, the point is is that a base at the 4:35:48all-time highs or the all-time lows is a 4:35:52very bullish and bearish quality.4:35:54Meaning, if it's at the if it's a base 4:35:55at the all-time highs, it's very 4:35:57bullish. If it's a base at the all-time 4:35:59lows, it's very bearish, right? And we 4:36:01want a breakout into the all-time highs 4:36:04because there's no resistance to the 4:36:06left stopping it from going lower. And 4:36:09similarly, we want to short under the 4:36:12all-time lows, especially if there's a 4:36:14consolidation at the all-time lows. We 4:36:16want to short under that consolidation,4:36:18right? Because there's no support 4:36:20stopping it from continuing lower. All 4:36:22right? And let me know if you guys have 4:36:25any questions about that. And uh hope 4:36:28this helps. We've kind of took some of 4:36:30the theory we already learned and put it 4:36:32into more practical information. Okay,4:36:34let me know if you have any questions.4:36:35Thank you. What's going on, guys? Hope 4:36:38you're having a great day. And today,4:36:41we're going to be talking about another 4:36:43tool that I use on my charts. Okay, we 4:36:47already talked about the 20-day moving 4:36:48average. We talked about the 200 day 4:36:51moving average, and we talked about how 4:36:52to read candlesticks. But I also use 4:36:54another very important tool, and that's 4:36:56called volume. Okay. And a lot of people 4:37:00kind of overhype the utility of volume.4:37:04They say that, oh, you know, they kind 4:37:06of come to these random conclusions 4:37:08about what's going on with the stock or 4:37:10crypto based on volume. Well, this or 4:37:12they'll say, oh, because we see a volume 4:37:14spike, this, this, and this is going to 4:37:16happen. And most of what you're going to 4:37:18hear about volume out there is complete 4:37:20nonsense. Okay? But I'm going to give 4:37:23you guys the actual way you could use 4:37:26volume to your advantage and the 4:37:29situations where volume is actually 4:37:31pretty useful. Okay? And by the way 4:37:34guys, before I start the class, I just 4:37:36want to tell you a lot of what I'm 4:37:37teaching doesn't only apply to volume.4:37:40This is stuff I've learned through 4:37:41experience. Okay? So you might catch me 4:37:44throughout this class kind of citing 4:37:46specific instances of, you know,4:37:49different things that have happened to 4:37:50me when with volume. And it's very 4:37:53experience-based, okay? This isn't stuff 4:37:55that I'm just finding on Google, okay?4:37:57This is stuff that I've actually gone 4:37:59through through, you know, taking on 4:38:01thousands of trades and through my years 4:38:03of experience. So how can volume be a 4:38:06powerful tool? And there's there's 4:38:08really only a couple ways you could use 4:38:10volume. And what is volume in the first 4:38:13place? It shows you how much a stock or 4:38:15a crypto is being bought or sold. It's 4:38:18showing you how many shares are being 4:38:20bought bought or sold. Okay? And volume 4:38:24is one of the primary ways of predicting 4:38:28price reversals. Okay? And using volume 4:38:32will greatly increase the accuracy of 4:38:35picking tops and bottoms with precision.4:38:39Okay? There's this really interesting 4:38:42idea of finding tops and finding 4:38:44bottoms, right? Where you're buying at 4:38:46the absolute lows or you're shorting at 4:38:48the absolute highs. A lot of people want 4:38:51to do that. And if you're one of those 4:38:53traders where you just have uh, you 4:38:55know, affinity towards finding those 4:38:56type of reversal plays, you're going to 4:38:59be using volume and looking at volume a 4:39:01lot. All right. And another thing that 4:39:05you know another uh you know way you 4:39:07could use volume is that it can indicate 4:39:09when a move usually it's a rally or a 4:39:12drop in price when it's beginning ending 4:39:16or continuing. Okay? And we're going to 4:39:19get into that. So first I want to kind 4:39:21of classify different 4:39:24uh I guess you could say different um 4:39:29versions of volume. I guess that's the 4:39:30best way to put it. So the first 4:39:33classification is amateur buy volume.4:39:37Okay, where let's say we have a multi-m 4:39:42move or a multi- bar bar move towards 4:39:46the upside where we have 1, two, 3,4:39:48four, five, we have five green bars in a 4:39:50row and we start to get a spike in 4:39:53volume towards the end of the move,4:39:57right? towards um like after you see the 4:39:59five green bars in a row and you get a 4:40:01huge spike in volume that suggests that 4:40:06that is the end of that move and a 4:40:08reversal might take place. Okay. And you 4:40:13can think of this increase and this 4:40:16spike in volume. And the re you could 4:40:19think of it as the last group of buyers 4:40:23who have finally bought the stock or 4:40:25crypto and that stock or crypto is 4:40:27running out of demand. Right? You could 4:40:29see that the green candlesticks. And the 4:40:32reason we call it amateur volume and you 4:40:34know specifically amateur buy volume is 4:40:37because 4:40:39what do the amateurs want to do? What do 4:40:41the novice traders want to do? Right?4:40:43They hate missing out on moves. When 4:40:45they see a stock or a crypto go up one,4:40:48two, three, four green bars in a row,4:40:51right? What do they do? They're like,4:40:52"Oh my god, I don't want to miss out on 4:40:54this rally. This this stock or crypto is 4:40:56going to continue higher. I don't want 4:40:57to miss out." And what do they do? They 4:40:59start buying at the highs, right? That's 4:41:03what amateurs and, you know, people who 4:41:05really don't do this professionally,4:41:07that's what they do. They buy at the 4:41:09highs and they sell at the lows losing 4:41:12money. So you could think of it, these 4:41:14candlesticks, this is amateur volume.4:41:16These are the 4:41:18amateur traders who are buying it at the 4:41:21highs with the fear that they're going 4:41:23to miss out on this move, but they 4:41:26already missed out on the move, right?4:41:27The professionals are buying it down 4:41:29here before the move, right? The 4:41:31amateurs are the ones that are buying it 4:41:32at the highs, right? So you could think 4:41:35of this as the last group of buyers. are 4:41:37finally getting into the stock. And this 4:41:40is really also effective when this rally 4:41:43is right into resistance. If this rally 4:41:46is directly into a resistance level,4:41:49it's much more potent, right? If you see 4:41:51this amateur buy volume, it suggests 4:41:53that we're probably, you know, going to 4:41:55see a reversal here. And like I said,4:41:58think of it as novice or beginner 4:41:59traders finally buying their position.4:42:01They saw the move already go up without 4:42:03them. they're finally buying the 4:42:05position up here when they, you know,4:42:07when the professionals are actually 4:42:09selling it up here, right? Someone, you 4:42:12know, someone is selling um their shares 4:42:15or their coins, right? Right. Their 4:42:17crypto coins to these amateurs and those 4:42:20are the professionals. The professionals 4:42:21are buying it down here and they're 4:42:23selling their shares or their coins to 4:42:26the amateurs up here. And you could see 4:42:30that that's when we get the uh sharp 4:42:32reversal lower, right? So let's 4:42:35continue. We also have amateur sell 4:42:38volume where let's say we have a multiar 4:42:41multi- red bar move lower and we start 4:42:44to get that amateur volume. Uh you could 4:42:47you could you know this spike in volume 4:42:49at the end of the move suggests that a 4:42:51reversal might take place. And you could 4:42:54think of this as the last group of 4:42:57sellers who have finally sold their 4:42:59stock or their crypto and the stock is 4:43:02running out of supply or the crypto is 4:43:05running out of supply. Okay. And it's 4:43:08very effective if this uh if this is 4:43:11actually kind of dropping into support 4:43:14and we also get that amateur buy volume 4:43:16with you know multi multi uh red bars 4:43:19lower. Okay. And think of it as novice 4:43:22or beginner traders. They're finally 4:43:25selling it, right? They were these 4:43:27beginner traders, these amateurs, they 4:43:30were down on their positions here,4:43:33right? They were losing money here, but 4:43:35then they see the stock or the crypto 4:43:37continue going lower, continue going 4:43:39lower, and their losses are increasing.4:43:41They're increasing. They're increasing 4:43:43until eventually they can't stomach,4:43:46right, that huge loss. And they're like,4:43:48you know what? I'm going to exit the 4:43:49position. And as soon as they're exiting 4:43:52the position, right, they're selling 4:43:54their shares to the professionals who 4:43:58are buying it down here. Okay, hopefully 4:44:01that makes sense and that's why we get 4:44:03that sharp reversal higher. Okay, so 4:44:07quick summary guys. If you have several 4:44:10green bars in a row or several red bars 4:44:12in a row and you get a huge volume spike 4:44:16um towards the end of that huge move 4:44:19higher probably means that you're going 4:44:21to get a reversal, right? And these are 4:44:24the amateurs who are buying it at the 4:44:26top, right? Because they they have the 4:44:29fear of missing out on the move. But 4:44:32remember, we're trying to be 4:44:33professional traders. We're the ones who 4:44:36are either shorting it up here or 4:44:38selling our positions that we bought 4:44:40down here.4:44:42Okay. Same thing with amateur sell 4:44:44volume. Uh maybe the people who right 4:44:47they're los they're they're taking big 4:44:50losses on their position. It's dropping.4:44:51It's dropping and dropping. They can't 4:44:53stomach their losses. They end up 4:44:55selling it down here. And those are the 4:44:57last, you know, group of sellers and 4:44:59then we get a pop higher. Okay.4:45:02Um so another 4:45:06um version of volume it's called 4:45:08igniting or classification of volume is 4:45:10it's called igniting volume right and we 4:45:14talked about an igniting wide range bar 4:45:17an igniting wide range candlestick we 4:45:20already talked about that okay so what 4:45:23you want you what you guys want to do is 4:45:25couple the wide range igniting 4:45:28candlestick with igniting volume. Okay.4:45:32So, this volume is igniting a brand new 4:45:37move or direction. The professionals,4:45:40they don't enter a stock at the end of 4:45:43the move. They enter at the beginning.4:45:45We talked about this. The professionals,4:45:47they're not buying it up here. They're 4:45:50exiting here. And if if anything,4:45:51they're shorting it up here. They're not 4:45:54selling it down here, right? If 4:45:56anything, they're buying it down here.4:45:58Okay? And so it makes sense, right? The 4:46:01professionals, they're entering at the 4:46:03beginning. And this is also a very 4:46:05potent reversal signal where you're 4:46:07often going to see amateur volume,4:46:10right? Followed by igniting 4:46:13volume, right? So this is amateur volume 4:46:17right here where the sellers are trying 4:46:20to get out of their position and the 4:46:23professionals start buying it here and 4:46:25this ignites the move higher, the 4:46:28reversal higher. There's also something 4:46:30called continuation volume and this 4:46:32really only applies to a base, right? So 4:46:35we already learned about the base 4:46:36breakout or the base breakdown.4:46:40Okay, so this is something that you want 4:46:42to uh combine with the base breakout 4:46:46where let's say you have a rally higher,4:46:49right? You have pretty high volume 4:46:51during the rally and then you start to 4:46:53get a base, right? You start to get a 4:46:56base. What you want to see during that 4:46:59base is very low volume. It indicates 4:47:03that there's not that much selling 4:47:05pressure. So when the stock does have a 4:47:08breakout and that igniting volume, it's 4:47:12more likely to succeed, right? So you 4:47:14don't want to see high volume during a 4:47:16base. You want to see very low volume 4:47:19during a base because that is 4:47:21continuation volume. And then when the 4:47:23stock breaks out over the highs of the 4:47:25base, that's when you want to see 4:47:27igniting volume. and this igniting 4:47:29volume, it sparks a new move higher 4:47:32after you haven't really had any volume 4:47:35or any buying and selling at all during 4:47:37the base. Okay, hopefully that makes 4:47:39sense. So, if you have a base, you want 4:47:42to have low volume. When you have that 4:47:44breakout, you want it to you want it to 4:47:46have igniting volume. Okay. Uh we 4:47:49already talked about the shakeout bar,4:47:52uh but let's kind of talk about it 4:47:53again. Why not? So happens when a stock 4:47:56attempts to break down from a bullish 4:47:58base on large volume and fails to break 4:48:00down, right? So you can combine volume 4:48:01with the shakeout where you have a base 4:48:03with low volume. All of a sudden you get 4:48:06that shakeout bar, right? This bottoming 4:48:08tail. It triggers everyone's stop 4:48:10losses. We get that drop, right? We have 4:48:13large volume during the shakeout and 4:48:15then it comes right back to the highs to 4:48:17finish here and then we continue basing 4:48:20and then we have the real breakout where 4:48:22we have huge igniting volume. Okay. Why 4:48:25is it called a shakeout? Most people who 4:48:27are in their long positions who are 4:48:29expecting the rally to continue higher,4:48:31they're placing their stop losses under 4:48:33the base. Right? When the stock attempts 4:48:36to break down, the stop losses are hit,4:48:40propelling the stock lower, right? All 4:48:41those sell orders, those stop losses are 4:48:43hit. It causes an influx of selling. The 4:48:46stock or crypto drops. And if the stock 4:48:49is still able to get bought and return 4:48:51all the way back up to the highs, then 4:48:53there's clear confirmation that we're 4:48:55going to continue higher. We already 4:48:56talked about this guys, but this is kind 4:48:58of a reminder. So, it's okay to see 4:49:00large volume during a shakeout before we 4:49:03have the igniting volume during the 4:49:04actual breakout.4:49:06Uh let's also talk about 4:49:09um potential reversals when we're 4:49:11looking at a base. So, this is something 4:49:15I can guarantee you you're not going to 4:49:18learn anywhere else. There's really I 4:49:21don't I would highly doubt there's any 4:49:23other course in existence that teaches 4:49:26this very topic because this is 4:49:28something I personally learned. This is 4:49:29something that over over the years I saw 4:49:32this so often that it's almost it's 4:49:34almost become just like its own trading 4:49:37strategy almost. Right? So, if you have 4:49:39a base, right, we have a a rally, we 4:49:42have a base, we're setting up for a base 4:49:44breakout, right? That's you're looking 4:49:46at it, you want to play it as a 4:49:47breakout, and you have a sudden volume 4:49:50spike that does not lead to a breakout.4:49:54This can be indicative that a stock or 4:49:57the crypto will reverse in price. And 4:49:59this usually applies more to intraday 4:50:02trading, meaning the smaller time 4:50:03frames, right? So, we know about we want 4:50:05to see igniting volume during the 4:50:07breakout, right? Right? When we actually 4:50:09make the move higher, we want igniting 4:50:10volume.4:50:12But let's say we all of a sudden get 4:50:14igniting volume, we get that volume,4:50:17huge volume spike, and you're seeing,4:50:19hey, this this stock or this crypto,4:50:22it's not breaking out. What's going on 4:50:25here?4:50:26When you see something like that, you 4:50:28should be very cautious because it 4:50:31usually means that we're going to 4:50:34actually end up getting a reversal 4:50:36because right, if this is a volume 4:50:37spike, if this is igniting volume, these 4:50:39are people buyers that are trying to get 4:50:42in and buy the cry stock or crypto and 4:50:46propel it higher, right? And if this is 4:50:48buying pressure, it's a green volume 4:50:50spike and it doesn't go higher, well,4:50:52why, right? Like, there has to be 4:50:54something going on. and just be 4:50:57cautious. It usually ends up leading to 4:50:58a um reversal. So, if you're if you're 4:51:01in a position, right, and all of a 4:51:04sudden you see a huge [snorts] volume 4:51:05spike and the stock isn't going in your 4:51:08favor, it probably means it's about to 4:51:10go against you. Okay? So, keep that in 4:51:12mind.4:51:14Um so, let's now talk about breakout and 4:51:18breakdown failures. If you have, let's 4:51:20say, a base breakout, right? you have a 4:51:22rally and you're you're basing, you're 4:51:24trying to go for the breakout.4:51:27Let's say you get the breakout, right?4:51:29It hits your entry, you're in the 4:51:30position, it breaks out, okay? And you 4:51:34get that igniting volume.4:51:37But let's say this igniting volume 4:51:40doesn't lead to a continuation move 4:51:43higher and in fact you end up failing 4:51:46and you end up starting you end up 4:51:48getting a red bar that's going lower 4:51:50right with a huge volume spike.4:51:53It it basically confirms that this is a 4:51:57failed breakout. If you get a rally and 4:52:01then a sudden drop, right? Like let's 4:52:03say you're in it, it goes up and then it 4:52:05drops against you on huge volume. Then 4:52:08you should maybe immediately exit that 4:52:10position and maybe even play it short.4:52:14Okay, it's considered a failed breakout 4:52:16and it suggests that the prices are 4:52:18going to actually continue lower. So 4:52:20just just understand that if you're if 4:52:22you're in a position and it breaks out 4:52:24on igniting volume but then immediately 4:52:26starts to drop and come back in also on 4:52:29huge volume it suggests that that's a 4:52:31breakout failure and get out of the 4:52:33position. Okay. So a lot of the times 4:52:35you can pinpoint uh failures by just 4:52:38looking at volume and let's say all of a 4:52:40sudden 4:52:42um you know we have a huge a huge volume 4:52:45spike and then it starts going against 4:52:46you in huge volume you can maybe exit 4:52:49before it hits your stop loss right cuz 4:52:52then you're like oh this is a breakout 4:52:53failure let me get out. Okay.4:52:56So, let's look at some examples here uh 4:52:58on how we could use volume, right? You 4:53:01could see that uh we dropped right into 4:53:04the 200 day moving average. We know that 4:53:07that acts as a floor, acts as support 4:53:10for our stock or crypto. We drop oh 4:53:14boom, we got a volume spike right here.4:53:17This led to a reversal, right? All of a 4:53:19sudden here, check this out. This volume 4:53:21spike correlated with this reversal. we 4:53:24drop, right? We don't really have a 4:53:26rever uh any volume reversal here. Okay,4:53:28it's not going to happen every time.4:53:30Then we drop we uh we rally again on 4:53:33large volume. We start to get a big 4:53:34volume spike, right? We drop. It's not 4:53:39too prevalent here. I think this is the 4:53:40best example because we actually have a 4:53:42multiar move lower. Like here it's it's 4:53:46green bar, red bar. We have a bunch of 4:53:48dogey candles. There's not that much 4:53:50momentum here, but here we're we're 4:53:52getting, you know, huge red bars in a 4:53:55row. And you could see that you could 4:53:57see the clear amateur volume and the 4:54:00clear igniting or professional volume,4:54:03right? We drop, right? We're getting 4:54:06that big amateur volume. All of the 4:54:08people, they're finally selling their 4:54:10position after they took a huge loss.4:54:12And then boom, we have an igniting move 4:54:14higher. We have ignite on green volume.4:54:17And boom, we continue higher. So you 4:54:19could see how this is really, you know,4:54:20it's it's really h it comes in handy 4:54:22when you're picking reversals. Let's 4:54:24look at another example. We have a large 4:54:26move lower, right? Aside from this green 4:54:28bar, this is all straight red bars in a 4:54:31row. We drop hard, huge volume spike, we 4:54:34reverse, right? Right here, huge volume 4:54:37spike, we end up dropping. Um, and I 4:54:40think it's really prevalent here, right?4:54:42We have a huge one, two, three, four,4:54:44five. five red bars in a row with we 4:54:47also have a bottoming tail here which 4:54:49suggests that this was you know this was 4:54:52selling off at some point we were all 4:54:54the way we were you know selling off to 4:54:56down here before the buyers started 4:54:58coming in right so we made a huge drop 4:55:01on huge volume right so notice that 4:55:04whenever you're seeing huge huge volume 4:55:06right you could see this is much uh 4:55:08greater than any other volume that we've 4:55:09had here drops huge volume that's when 4:55:13we get the reversal Right? And you can 4:55:15see these red this red volume. That's 4:55:17amateur volume. And then you can see the 4:55:19green volume that's sparking the new 4:55:20move higher. Those are the professionals 4:55:22buying down here. Let's look at another 4:55:25example. I mean, this is perfect. We 4:55:27have a huge move lower. We have a double 4:55:29bottom. We have a bottoming tail on huge 4:55:32volume. We get the reversal. So, we 4:55:35didn't really get amateur buy volume 4:55:36here or amateur volume. We kind of did 4:55:39maybe with this candle, but we get a lot 4:55:41of igniting volume that ignites the new 4:55:43move higher. Same thing here. We drop 4:55:46huge spike in volume and ignites this 4:55:49move higher. Okay.4:55:52Um, so let's let's go over the example 4:55:54where we talked about continuation 4:55:56volume and igniting volume. Notice we 4:55:58have a rising 20-day moving average. We 4:56:00have a really tight base, beautiful base 4:56:03that's at based right into the 20-day 4:56:05moving average. uh as it's rising, we 4:56:08get that breakout. Notice how during 4:56:10this base, look how low the volume is.4:56:14It's beautiful. And then boom, we break 4:56:16out on huge volume and we continue 4:56:19higher. Sparks this new move higher.4:56:22Beautiful.4:56:24Let's look at another example. Let's 4:56:25let's not only talk about volume.4:56:27There's a bunch of stuff stuff to talk 4:56:29about here. Rising 20-day moving 4:56:31average. That's underpriced. Check mark.4:56:34right here. We have huge volume igniting 4:56:37this move, right? We end up getting a 4:56:39pullback and we get a buy setup, right?4:56:41We get a buy setup right here. Um, it's 4:56:45right at the 20-day moving average.4:56:46Really nice buy setup, right? We have 4:56:48one, two, three red bars in a row. Um,4:56:51kind of a deep retracement, but it's 4:56:53right to the 20-day moving average.4:56:54Really nice entry bar. We rally to 4:56:57resistance, right? Because the previous 4:56:59highs is resistance. We start to base 4:57:01that resistance. And where do we base 4:57:03into? We base right into the 20-day 4:57:06moving average, the rising 20-day moving 4:57:09average. Beautiful with continuation 4:57:11volume. Um, you know, really, really low 4:57:15volume.4:57:16Um, and then we get that huge spike in 4:57:19volume during the breakout, right? We 4:57:22continue higher and then we get a buy 4:57:23setup right here, right? Pullback 4:57:25pattern. Beautiful right to the 20-day 4:57:28moving average. Dogey candle. Really 4:57:30small entry bar. really nice risk uh 4:57:32reward to risk rally. Everything is 4:57:35beautiful about this chart. Let's look 4:57:37at another example here. This is 4:57:39actually a gap up. So, this happens with 4:57:41stocks. We'll talk about that later. But 4:57:43you could see, right, we're kind of down 4:57:45here. We're we're we're kind of just 4:57:47sideways down here. We get a gap up and 4:57:50on huge volume. And this is professional 4:57:53volume, right? This is these are these 4:57:56are the professionals starting the new 4:57:57move higher. It gapped right to the 200 4:57:59day moving average and ignited a new 4:58:02move higher. Another example, we get a 4:58:05drop, it ignites a new move lower. You 4:58:07could see huge volume spike. Okay, so 4:58:10something that I really want to 4:58:12emphasize here, guys, is like I said,4:58:15volume is really useful for reversals,4:58:17especially when it's a, you know, when 4:58:19you get a huge move, like for example,4:58:22you get a huge drop that a big volume 4:58:25spike usually means we're going up,4:58:27right? Huge drop. Volume spike usually 4:58:30means we're going up. Same thing right 4:58:32here. I mean, this is a perfect example.4:58:34Huge drop. I mean, one, two, three,4:58:36four, five red bars in a row. Nice 4:58:38amateur volume and then boom, we get 4:58:40igniting volume.4:58:42Um, so notice how sharp increases in 4:58:44volume during major sell-offs or rallies 4:58:46lead to sharp reversals as well. Okay?4:58:50And if you guys have noticed, especially 4:58:52looking at this chart, right, you're 4:58:55starting to notice how we're putting 4:58:56everything together in this course.4:58:58We're putting the 20-day moving average,4:59:01right? We're combining it with the 4:59:02strategies we've learned. We're 4:59:03combining it with volume. We've we're 4:59:05combining it with the 200 day moving 4:59:07average. We're combining it with reward 4:59:09to risk. Okay? So, towards the end of 4:59:12the course, I'm going to try to give you 4:59:13guys more practical kind of tests or cra 4:59:16practical uh quizzes on this stuff. But 4:59:19yeah, volume very very useful guys. Um,4:59:22hope you guys kind of understand the 4:59:24theory behind amateur volume and 4:59:26igniting volume. Um, this is important 4:59:29stuff here. But just understand that 4:59:30it's mostly used for reversals. And if 4:59:32you have a base make, you want to see a 4:59:34base on very low volume. Okay guys,4:59:36hopefully that makes sense. Have a good 4:59:38day guys. This was a great class. See 4:59:40you.4:59:43Now that you've learned everything that 4:59:45you need to know about reading price 4:59:47action, let's use that information and 4:59:49learn how to identify high quality 4:59:52setups in the markets. And that's 4:59:54exactly what we're going to be talking 4:59:55about in this next chapter. I'm going to 4:59:58teach you every single trading strategy 5:00:01that I use on a dayto-day basis. So,5:00:04let's not waste any time. Let's hop 5:00:05right into this chapter. What is going 5:00:08on, guys? Hope you're having a great 5:00:10day. We have finally reached the 5:00:12strategies section of the course where 5:00:14I'm actually going to be teaching you 5:00:16different trading setups that you can 5:00:18begin spotting on your charts and 5:00:20hopefully taking advantage of. Okay, so 5:00:24this is finally the most exciting part 5:00:26of the course. But before we go into 5:00:28some of the presentations that I have 5:00:30prepared for you guys, I want to talk 5:00:32about a very important concept. And this 5:00:35is going to kind of preface the uh other 5:00:38strategies in the other presentations 5:00:39that I have prepared for you guys. And 5:00:41that concept is price correction. Okay.5:00:46So I have a I'm going to draw a diagram 5:00:48here for you guys. So what's under what 5:00:50we have to understand is that with price 5:00:54action whether it's for a stock or a 5:00:56crypto or a for or forex it really 5:00:59applies to any financial instrument on 5:01:02the market what we have to understand is 5:01:04that price always corrects itself in 5:01:08some way right can't just go infinitely 5:01:12higher at some point we are going to 5:01:15have some sort of price correction and 5:01:18That price correction could happen in 5:01:20two different ways. It could either 5:01:22happen through a pullback or a 5:01:24retracement or it can happen through u a 5:01:27consolidation or a base. So let's first 5:01:31talk about the pullback, right? So let's 5:01:35say we have a really bullish rally,5:01:37right? We're in a we're in a very 5:01:39bullish stock. There's a lot of buying.5:01:41There's a lot of, you know, strong 5:01:42momentum.5:01:44after a really strong rally, right? At 5:01:48some point, we have to see some sort of 5:01:50retracement or some sort of base, some 5:01:52sort of uh price correction, right? So 5:01:56price can correct itself in the first 5:01:58way through a pullback where when a 5:02:02pullback happens right we get a minor 5:02:06drop where perhaps the reason of this is 5:02:09there's a lot of buyers who were buying 5:02:11it down here or buying it over here and 5:02:14you know they're enjoying their profits 5:02:16as the stock or crypto is rising and at 5:02:18this point they want to start taking 5:02:20profits right so all those buyers start 5:02:23taking profits which leads to a drop or 5:02:26in other words a price correction or 5:02:29perhaps there's a ton of people up here 5:02:31who are skeptical that the stock or 5:02:34crypto is going to continue higher. So 5:02:36what they do is they short it up here 5:02:38thinking they're going to make money,5:02:40you know, if this thing drops in price.5:02:42Okay, so that's one way we could have a 5:02:46price correction. And of course after 5:02:49the correction, right, ideally if it's 5:02:51if it's a really bullish uptrend, right,5:02:54if there's a lot of buying pressure, a 5:02:55lot of buying momentum, we're inevitably 5:02:58going to continue higher, right? So our 5:03:01goal is to buy it where our goal is to 5:03:04buy it right down here, right? If we 5:03:06missed if we missed the opportunity all 5:03:10the way down here, our goal is to buy it 5:03:13during the correction,5:03:15right? Why? Like our goal isn't to buy 5:03:17it at the highs. It's to buy it on the 5:03:19pullback, right? Because after you would 5:03:22you would assume that price has 5:03:23corrected corrected itself. We're ready 5:03:25to continue higher again. This, my 5:03:28friends, is called a buy setup.5:03:32Okay, this is a buy setup. So, that is 5:03:36one of the strategies that we're going 5:03:38to be learning, right? Buying, you could 5:03:40think of it as buying the dip. I know 5:03:42that's a really popular phrase, but this 5:03:45is what that is. And that dip, like I 5:03:47like I mentioned, is a price correction.5:03:49So, we are buying this price correction.5:03:51So, that's one way price can correct.5:03:54Another way price corrects is let's say 5:03:56we have the same rally. We have a huge 5:03:58rally.5:04:00We can correct through time or in other 5:04:02words through a consolidation or a base,5:04:05right? Where we actually just stay at 5:04:07the highs of this rally, right? Maybe at 5:04:10this point there aren't enough buyers 5:04:13to, you know, propel this stock or 5:04:16crypto higher. And there's also not 5:04:17enough sellers to, you know, cause it to 5:04:20pull back. So instead, we just sort of 5:04:23base. We just sort of stay at this in 5:04:25this price range, right? Where we don't 5:04:27have enough buyers to bring it higher,5:04:29but we also don't have enough sellers to 5:04:31bring it down. So we end up just 5:04:33consolidating or staying near the top of 5:04:37this base, right? before we inevitably 5:04:41continue higher. And our goal, right,5:04:46our goal is to buy it as soon as it 5:04:50breaks out of that base. Right after,5:04:53you know, as it's consolidating, right?5:04:55Right. When the price correction has 5:04:57finished, our goal is to buy it at this 5:05:00point and enjoy the move higher. And 5:05:02this strategy 5:05:04is called a breakout.5:05:09Okay, a and specifically 5:05:12a base breakout.5:05:14Okay, so this is kind of the fundamental 5:05:18anatomy of the two strategies that we're 5:05:21going to be talking about first. We're 5:05:22going to be talking about the breakout 5:05:24first and then we're going to be talking 5:05:26about the buy setup. But something 5:05:27that's important to note from listening 5:05:30to everything I'm telling you guys in 5:05:32this presentation is this is how price 5:05:34corrects itself, right? And based on how 5:05:37price corrects itself, we could find 5:05:40opportunities,5:05:42okay? We can find opportunities to get 5:05:45into the stock and enjoy the next move 5:05:48higher, right? Because to be honest,5:05:50guys, you're not always going to be able 5:05:52to buy it down here or buy it down here,5:05:55right? Sometimes you're going to be late 5:05:57to the party. But you have to identify 5:06:00the points where price correction has 5:06:02completed and we're ready to continue 5:06:04higher, where price correction has 5:06:06completed and we're ready to buy the 5:06:09breakout and enjoy the next move higher.5:06:11Okay, hope this makes sense guys and in 5:06:14the next class we're going to we're 5:06:16going to be specifically talking about 5:06:17the base breakout. Okay, so make sure 5:06:21you understand this concept and 5:06:23understand that price cannot go 5:06:26infinitely higher. It cannot go 5:06:28infinitely lower. At some point, there 5:06:30needs to be some sort of correction.5:06:32Okay? And I'll see you guys in the next 5:06:35class, guys. We're going to be talking 5:06:36about the base breakout. Thanks. What is 5:06:38going on, guys? Hope you're having a 5:06:40great day. Today, we are going to be 5:06:42talking about the base breakout. And 5:06:46hopefully you guys understand what we 5:06:48talked about in the last class and how 5:06:50price corrects itself in two ways.5:06:52Either through a pullback or through a 5:06:55base. Okay? Okay. And today we are going 5:06:57to be talking about the base breakout or 5:06:59the base breakdown setup. Okay. So let's 5:07:02get right into it. So the base breakout,5:07:06what is it? This is one of the most 5:07:08potent and fundamental trading 5:07:11strategies that exist. In fact, this is 5:07:14my favorite trading strategy that 5:07:16exists. I make money off this setup 5:07:19every single day, okay? Because I see it 5:07:22all the time. It's a very, you know,5:07:25well-known setup. And if you know how to 5:07:29play this setup correctly, I can promise 5:07:32you, you are going to make a lot of 5:07:34money trading, you know, either whether 5:07:36it's stocks or crypto or forex. Okay?5:07:38It's that powerful of a setup.5:07:41And like we talked about, a base or a 5:07:43consolidation is a period of time when a 5:07:46stock or a crypto is trading in a 5:07:49particular price range. It's not moving 5:07:51out. It's not moving above or below that 5:07:54price range, right? It's sort of staying 5:07:55at the same price level. And our goal as 5:07:59traders is to take advantage when price 5:08:01breaks out or breaks down out of that 5:08:05range, right? We're timing our entry 5:08:08when price breaks out or breaks down.5:08:11This works on any financial instrument 5:08:14including stocks, crypto, and forex.5:08:16Okay? This also works on any single time 5:08:18frame and it's a very good highreward 5:08:21to-risk setup. That's one of my favorite 5:08:23parts about it. So, let's understand the 5:08:27anatomy of the base breakout. And we 5:08:29kind of looked at this before, but let's 5:08:30try to get a deeper understanding. So,5:08:32like we talked about, price corrects 5:08:34itself either through a pullback or 5:08:37through a base. Okay? So, in this case,5:08:39we're talking about the base. So after,5:08:42you know, a large rally higher, we have 5:08:44a base where price is sort of, you know,5:08:46not it's not trading above or below this 5:08:49price range. We're just sort of chilling 5:08:51at the highs of this rally, right? And 5:08:55our goal as traders is to find the 5:08:58moment that price breaks out of this 5:09:02range and continues higher. So we want 5:09:04our timer entry over here. Right here.5:09:09Okay. And we have to understand that in 5:09:12a bullish uptrend, right, if there's a 5:09:15lot of buying pressure in that stock or 5:09:17crypto after a large move higher, oftent 5:09:21times it's going to correct itself 5:09:24through a base. So, it's really 5:09:26important that you guys can identify 5:09:29when this is happening so you could take 5:09:32advantage of it and take advantage of 5:09:34this point right here so you can enjoy 5:09:36the next move higher and hopefully make 5:09:38a lot of money. Okay? And uh I believe 5:09:42that's that's all. So, just remember 5:09:45guys, during this process, price is 5:09:47correcting itself and as soon as it's 5:09:49done with the correction, we're ready to 5:09:51continue higher and this is where we're 5:09:53buying it. Okay? So let's this is kind 5:09:56of a little uh graphical representation 5:09:58of this. We have a rally and then we 5:10:00have a bunch of candlesticks that are 5:10:02trading in you know at the highs of this 5:10:06rally. We're trading in this price range 5:10:09and just understand that at the top of 5:10:11the base right at the highs of the base 5:10:14that is an area of resistance right 5:10:16because the candlesticks are sort of 5:10:18respecting that high of the base. So it 5:10:21creates a resistance and the same thing 5:10:24happens at the lows, right? The 5:10:26candlesticks are respecting the lows of 5:10:27the base, right? And that's going to be 5:10:30support. So if you ever see a base like 5:10:33this, just understand that over the 5:10:35highs of the base, we have an area of 5:10:38resistance there. And under the lows of 5:10:40the base, we have an area of support 5:10:42there. Okay.5:10:45So let's talk about the actual base 5:10:47breakout breakout setup and our entry 5:10:51and stop-loss. Okay, so we have the 5:10:54rally, we begin to consolidate, right?5:10:58We are going to place our entry over the 5:11:01highs of the base and we are going to be 5:11:04placing our stop loss under the lows of 5:11:07the base. Right? So let's say you have a 5:11:09base like this. Find the absolute highs,5:11:12right? In this case, it would be over 5:11:13this candle and place your entry over 5:11:16the highs of that base. And my 5:11:18recommendation is, let's say the highs 5:11:20of the base is, let's say it's $6. You 5:11:23want to place your entry at about 602 5:11:26603. You want to give it 2 or 3 cents 5:11:29room. Okay? So, you you give this you 5:11:32give the stock or crypto the actual, you 5:11:34know, room to break out and truly break 5:11:37out of this resistance. Okay? And the 5:11:40reason our entry is above the highs of 5:11:42the base is because that's when price is 5:11:45breaking that resistance, right? We're 5:11:47timing our entry with the break of this 5:11:50resistance. All right?5:11:52And for a stop loss, we're placing our 5:11:54stop loss under the lows of the base 5:11:58because that's where we have an area of 5:12:00support. So this is super easy, guys. If 5:12:03you see a base and you want to, you 5:12:05know, you want to play it, you want to 5:12:06get into it, entry is over the highs.5:12:10Find the absolute highest point of the 5:12:11base and place your entry above that 5:12:14high. Place your stop loss under the 5:12:16absolute low of the base. Okay, that's 5:12:18your entry and your stop loss. Pretty 5:12:20easy stuff. Now, let's talk about the 5:12:2320-day moving average requirement. We 5:12:26already reviewed the 20-day moving 5:12:28average and how important it is. And we 5:12:31know that we want to see the 20-day 5:12:33moving average either trending higher or 5:12:36trending lower. Right? If we're bullish,5:12:39we're in an uptrend, we want to see the 5:12:41moving average trending higher, ideally 5:12:44at a 45 degree angle and under price.5:12:48Okay? So, that's what we need here for a 5:12:52base breakout. We want the 20-day moving 5:12:54average to be trending higher and under 5:12:57price. That is a requirement. You need 5:13:00to have that if you want to play the 5:13:02base breakout. It is the most crucial 5:13:05requirement. Okay? And the reason we 5:13:08want it is because oftent times during a 5:13:10really bullish uptrend, stocks and 5:13:12crypto, they tend to base into the 5:13:1620-day moving average. They tend to 5:13:18just, you know, consolidate right into 5:13:20it. And as soon as it's at or near the 5:13:2320-day moving average, that's when it 5:13:25ends up breaking out. Okay? This is just 5:13:27something that happens. Okay? Okay? And 5:13:28we're going to show you guys examples of 5:13:30it soon. So, something to understand is 5:13:33that at this point right here, right?5:13:35Let's say we're right here. We are 5:13:38extended from the 20-day moving average,5:13:40right? And by [snorts] extended, we 5:13:42learned about this prior is that we know 5:13:44that extension means distance. There's 5:13:46distance between the 20-day moving 5:13:48average and price. Meaning price is kind 5:13:50of overbought, right? It's a little 5:13:52extended. So, what do we do? We need to 5:13:55have a price correction. So, we end up 5:13:58basing and as we're basing into the 5:14:0120-day moving average, price is 5:14:04correcting itself and it's getting ready 5:14:06to make the next move higher. So, our 5:14:10goal is to time your entry when price 5:14:15has based into the 20-day moving average 5:14:18or we just want at least the 20-day 5:14:20moving average to be near price. Okay?5:14:22We don't want to be buying it here cuz 5:14:24right here, there's still some distance 5:14:26between the 20-day moving average in 5:14:28price. There's still some extension. We 5:14:30want to be buying when it's at or near 5:14:32the 20-day moving average when there's 5:14:34no extension. Okay? When there's uh 5:14:37we're not overbought at all. Okay?5:14:40Hopefully that makes sense. So 5:14:43overarching theme here, guys, is for a 5:14:45breakout, make sure the moving average 5:14:48is trending and underpriced, and you 5:14:51want to be buying it at or near the 5:14:5320-day moving average. Okay,5:14:56let's let's continue here. And this is 5:14:58something that I often times see. What I 5:15:01see often is a rally higher, then we 5:15:05begin to base. We begin to consolidate.5:15:08As soon as we hit the 20-day moving 5:15:10average, we have that breakout and our 5:15:14price is going to be at this resistance 5:15:17level, right? It's over the base. This 5:15:18line is directly over the base. This is 5:15:21our entry point. So, we would be 5:15:23entering as this green bar is being 5:15:26formed. We would enter right there and 5:15:29then we would enjoy these profits going 5:15:31higher. Now often times what I see is 5:15:34after this primary breakout after we 5:15:36break out of this resistance and we 5:15:38continue higher I often see us having 5:15:41another sort of price correction but 5:15:43this time it happens through a pullback.5:15:46So after this rally we actually pull 5:15:49back 5:15:50okay and we form a buy setup or a you 5:15:55could call it a secondary breakout.5:15:57We're going to be learning about the buy 5:15:58setup later, but oftentimes after this 5:16:00initial breakout, we pull back, we form 5:16:03the buy setup, and then we continue 5:16:05higher. And you can think of this as a 5:16:06pullback pattern, right? Like I said,5:16:08we're going to be learning about that in 5:16:10the next class. But what I what I really 5:16:13want to emphasize here is oftent times 5:16:16this line right here, this entry point,5:16:18this is serving as resistance, right?5:16:19We're break we're buying it when it 5:16:21breaks the resistance of the base o over 5:16:24the highs of the base. But this prior 5:16:27resistance level right is now turning 5:16:31into support for the stock or crypto 5:16:34where we actually pull back to this 5:16:39prior resistance which is now support.5:16:41So during this point it was acting as 5:16:44this resistance level was acting like a 5:16:46ceiling. As soon as we broke out of that 5:16:48ceiling, it's now turning into support 5:16:51and we retrace right back to that 5:16:53support level before we continue higher.5:16:56Okay, now this doesn't always happen,5:16:59but I think it's something to, you know,5:17:01show you guys. I think it's important.5:17:02Here's an example of that. Okay, where 5:17:06we have a large rally higher, right?5:17:08Look at this. We have a rising 20-day 5:17:10moving average. We have a huge rally 5:17:13higher, okay? At this point right here,5:17:16there's significant extension between 5:17:19price and 20-day moving average. Price 5:17:21needs to correct itself in some way. So,5:17:24first we have a pullback and it sets up 5:17:27as a pullback pattern or a buy setup,5:17:30right? That triggers higher that goes 5:17:33higher, but there's still there still 5:17:35needs to be some sort of correction,5:17:36right? This was a huge move. It needs 5:17:38additional correction. So, what do we 5:17:40do? We base and we stay in this price 5:17:43range. And we stay in this price range 5:17:44until eventually the 20-day moving 5:17:47average, this blue line starts to starts 5:17:49to curl under price. It starts to trend 5:17:53higher and that's when we get the base 5:17:56breakout right here where this red line 5:17:58is the entry point. This red line is the 5:18:01resistance. We break out of that 5:18:03resistance and we enter right here. We 5:18:07rally higher before we have that 5:18:08pullback. And this prior resistance,5:18:12which was our prior entry point for this 5:18:14primary breakout, it now becomes 5:18:18a a support for this pullback. Okay.5:18:22Hopefully that makes sense, guys. All 5:18:24right. Okay. Very good. Next,5:18:30excuse me, we're [clears throat] going 5:18:31to be understanding the base breakdown,5:18:34which guys, the base breakdown is the 5:18:37absolute opposite of the base breakout.5:18:40It's the same exact thing except it's 5:18:42the opposite. We're going to be taking 5:18:44advantage of shorting it, okay? But 5:18:46nevertheless, I'll go over it. As we 5:18:50know, price corrects itself in two ways.5:18:53Either a pullback or a retracement or a 5:18:55base. So, we have a drop, right? Let's 5:18:58say we have this is a downtrend, right?5:19:00It's clearly a downtrend. We have a lot 5:19:03of bearish momentum. There's a lot of 5:19:05selling pressure. We have a drop 5:19:08and we consolidate at the lows, meaning 5:19:12right, we have a drop. It wants to 5:19:15continue lower, but it needs to correct 5:19:16itself first. So, it corrects itself 5:19:19through the base. We're chilling at the 5:19:21bottom of this of this drop before right 5:19:24here. We have that breakdown. We short 5:19:26it.5:19:27We have a nice move lower, right? We 5:19:30short it right here once it's breaking 5:19:32below this base. That's why it's a 5:19:34breakdown, right? We have a drop and 5:19:37then we start to base again at the lows 5:19:39of this rally, right? And we have 5:19:40another breakdown here where we're 5:19:42trying to enter when price is breaking 5:19:45down out of this bearish consolidation.5:19:49Okay, so like I said guys, our goal is 5:19:52to catch the moment price breaks down 5:19:55and enjoy the next move lower and we're 5:19:57shorting it. Okay, and we have to 5:20:00understand that a bearish downtrend 5:20:01whenever we have a downtrend, price 5:20:03tends to base after a large drop. That's 5:20:07just what happens. Okay, that's the way 5:20:09price tends to correct itself. It tends 5:20:11to correct itself through a base at the 5:20:13lows.5:20:14So the same thing here after we have a 5:20:17drop and we have this consolidation, we 5:20:19have these candles trading in this price 5:20:21range. At the bottom of the 5:20:23consolidation,5:20:25we have an area of support and at the 5:20:27top of the consolidation over the highs 5:20:29of the base, we have an area of 5:20:31resistance. The same exact thing as we 5:20:33discussed before except the opposite.5:20:36So what's the entry? It's the same exact 5:20:38thing except the opposite. Our entry is 5:20:42going to be under the lows of the base 5:20:44and our stop loss is going to be over 5:20:46the highs of the base, right? Cuz we are 5:20:48entering when price is breaking that 5:20:53level of support. That's when we're 5:20:54timing our entry and we are placing our 5:20:57stop loss over the highs of the base 5:20:59because that's where the area of 5:21:01resistance is. Okay.5:21:04So yeah, to emphasize, we're we're 5:21:07trying to enter when it's breaking that 5:21:09support and that's where we enter and we 5:21:12enjoy this move lower. Okay, so entry 5:21:14under the lows of the base, stop loss 5:21:16over the highs of the base when we have 5:21:18a breakdown. Okay,5:21:21very good. Let's continue.5:21:24So just like the breakout, we have a 5:21:26very strict uh 20-day moving average 5:21:29requirement. Like I said before, we want 5:21:31the 20-day moving average to be trending 5:21:35lower and overpriced 5:21:38when we're in a downtrend or when we're 5:21:40bearish, right? We want it to be 5:21:41trending lower and overpric. So that's a 5:21:44requirement.5:21:45[snorts] And oftent times stocks in 5:21:47crypto, they base into a declining 5:21:5020-day moving average. This is the way 5:21:52they correct themselves cuz as of right 5:21:54as of right here, at this point here,5:21:56price is extended from the 20-day moving 5:21:58average. And by basing into the 20-day 5:22:01moving average, we have that price 5:22:04correction and we're finally ready to 5:22:06short it as soon as it breaks under that 5:22:09base 5:22:10and we want to time our entry when price 5:22:12has already based into the 20day moving 5:22:15average. Okay, it's the same exact idea,5:22:17guys.5:22:19Um, and same exact idea here as well.5:22:22Um, we have a drop, we base, right? our 5:22:26entry. This is our entry point, which is 5:22:30an right, the area of support. So, we're 5:22:32timing our entry. When it breaks this 5:22:35area of support, right? This is the 5:22:37primary breakdown that we're playing.5:22:39We're at the 20-day moving average.5:22:42We drop, right? Cuz remember, we shorted 5:22:44it here below the base. This is the 5:22:47primary breakdown. And oftent times, we 5:22:48have a retracement.5:22:50And this retracement goes back to the 5:22:52declining 20-day moving average. and 5:22:54also it goes to the initial area of 5:22:58support right our entry that's now 5:23:01becoming resistance for this stock or 5:23:03crypto okay and this is our first 5:23:05retracement to the 20 this previous area 5:23:09of support has now become resistance 5:23:11okay this doesn't always occur but I 5:23:13thought it was important to share it 5:23:15with you guys and we're going to be 5:23:16talking about reward to risk in the next 5:23:19class 5:23:20what is going on guys we're going to be 5:23:22continuing the presentation exactly 5:23:24where we left off. And we're going to be 5:23:27talking about reward to risk. And this 5:23:30is one of my favorite parts about the 5:23:32base breakout is the reward to risk 5:23:36aspect of it. And my biggest 5:23:39recommendation guys is after you watch 5:23:43this class and later on in the course,5:23:46after you watch my risk management and 5:23:49share sizing course, please come back to 5:23:52this section of the course after you 5:23:55understand the risk management, after 5:23:57you understand share sizing. And I think 5:24:00this whole section of the breakout is 5:24:03going to make a lot more sense. But 5:24:05nevertheless, I'm going to introduce uh 5:24:07this concept to you guys right now. But 5:24:09just keep in mind, you may want to come 5:24:11back to this uh to this part of the 5:24:14video in the future. So my question for 5:24:17you guys is out of these two setups,5:24:21which one is better in terms of reward 5:24:24to risk? Okay,5:24:27is it number one or number two? Right?5:24:31and take, you know, pause the video,5:24:33take a second to think about it. Which 5:24:35one do I like better from a reward to 5:24:37risk uh uh standpoint? Which one has a 5:24:40lot higher potential, a lot higher 5:24:44potential to be lucrative, right? Which 5:24:46one has the higher potential to make us 5:24:48a ton of money? That's what we're here 5:24:50to do. We're here to make money. So, if 5:24:53you guys have thought about it and you 5:24:54guys selected number one, this one right 5:24:57here, you would be correct.5:25:01Let's talk about it. So, over the base,5:25:07we have our entry point, right? We 5:25:09always place our entry over the base.5:25:12So, for both of these setups, our entry 5:25:14is at $3, right? Over the base is at $3.5:25:18Over this base, we have $3, right? But 5:25:21let's say our stop loss,5:25:25right, is supposed to be under the base.5:25:27In this situation, it's at 290, right?5:25:30It's directly under. We have 290 as the 5:25:33price of our stop loss. However, in this 5:25:36situation,5:25:37you know, the base, you could see it's a 5:25:39little bit of a larger base. Our stop 5:25:42loss is under it, but it's at $2.70,5:25:45right? So, this one's at 290. This one's 5:25:47at 270. Okay? So, we have the same 5:25:50entries but different stop-loss prices.5:25:53Okay. So, what is the size of our stop?5:25:56Well, the size of our stop, all we have 5:25:59to do is uh subtract the stop-loss price 5:26:03from the entry price, right? So, $3 5:26:07minus 290 is 10 cents. The size of our 5:26:10stop is 10 cents. So in other words, if 5:26:13we enter this setup, this breakout at 5:26:17$3,5:26:19if that, you know, if our trade drops by 5:26:2210 cents and hits 290, we are out of the 5:26:25trade, right? That is our risk. If it 5:26:28drops 10 cents from our from our entry,5:26:31we are out of the trade. Now, in this 5:26:34case, our entry is at $3. Our stop loss 5:26:37is at 270. $3 minus 270, that's 30 5:26:40cents. 30 cent stop size, meaning if we 5:26:43get in at $3, that's our entry point,5:26:46and it drops 30 cents 5:26:48right to 270, the bottom of the base 5:26:51where we have support, that's when we 5:26:53exit the trade. Okay, so hopefully that 5:26:57makes sense. Stop size 10 cents here.5:26:59Stop size 30 cents here. If we are 5:27:02risking 5:27:03$100 on both of these setups, meaning 5:27:08$100 is the maximum amount that we could 5:27:12lose for this trade, right? $100. Like,5:27:16we can't lose more than $100, right?5:27:20What are we going to do? We have to 5:27:22share size accordingly, right? So, if 5:27:24we're risking $100 with a 10 cent stop,5:27:28right? Meaning if this if we get in at 5:27:31$3 and it drops 10 cents to 290, if it 5:27:34hits 290, we're out of the position. How 5:27:37many shares do you have to buy to ensure 5:27:40that if this drops by 10 cents and hits 5:27:43the stop-loss price, we only lose $100?5:27:47And I'll make it easy for you guys. The 5:27:49formula is take your risk, your dollar 5:27:52amount risk, which is $100,5:27:55divide it by the size of your stop,5:27:57which is 10 cents.5:27:59So, a,000 shares, meaning we could buy 5:28:02a,000 shares at $3 and if it drops 10 5:28:06cents to our stop-loss price at 290, we 5:28:10will lose $100, which is the maximum 5:28:12amount we are willing to risk.5:28:15In this scenario, we're still risking 5:28:18$100. The risk is the absolute same.5:28:21We're risking the exact same amount in 5:28:23both of these setups. However, in this 5:28:25case, we have a 30 cent stop, right?5:28:27because our stop loss is under the base 5:28:29at 270. So if we're risking $100 per 5:28:32trade with a 30 cent stop, well the risk 5:28:35unit $100 divided by the size of your 5:28:39stop stop size is 30. 100 divided by.3 5:28:44is 333 shares. Meaning if you get in at 5:28:50$3 and if this drops 5:28:5330 cents with and you and you bought 333 5:28:57shares and it drops 30, you will lose 5:29:00the maximum amount you're willing to 5:29:02lose, the $100. So looking at what I've 5:29:06presented you right now, you must have 5:29:09an immediate conclusion. And that 5:29:12immediate conclusion is the tighter the 5:29:14base, meaning the smaller the base,5:29:16right? that you could see how this one 5:29:17is all sloppy. It's all over the place.5:29:19It's it's it's a large base. It's not 5:29:21tight like this one. You can see this 5:29:23one's tight. It's small. It's there.5:29:25It's clean, right? It's not sloppy and 5:29:30uh you know, with a lot of tails and all 5:29:31that, right? The tighter the base, the 5:29:34tighter the stop-loss, right? In this 5:29:36case, the tighter the base, we have a 5:29:38smaller stop size here than there,5:29:43the better the reward versus risk.5:29:45Because think about it, we're risking 5:29:47$100 in each of these setups. However,5:29:50because we have a smaller base here, we 5:29:53have a smaller stop size. With a smaller 5:29:56stop size, we're able to purchase more 5:29:58shares, right? If we're able to purchase 5:30:01more shares, well, that means our reward 5:30:04is a lot higher, right? Like, if this 5:30:06goes up a dollar, right, we're going to 5:30:08make $1,000. However, in this situation 5:30:11with this entry and with this stop-loss,5:30:13if this goes up a dollar, we're only 5:30:15going to make $333.5:30:18Okay? So, we're risking the exact same 5:30:21amount, but our potential reward with 5:30:24this tight base and this small stop size 5:30:27is significantly higher. So guys, always 5:30:30look for tight bases, you know, really 5:30:33clean, tight bases, uh, as opposed to 5:30:37really sloppy bases that are all over 5:30:39the place because the risk-to-reward is 5:30:42going to be way better. And honestly,5:30:45the tight bases, the clean looking bases 5:30:47that are not sloppy, they tend to work a 5:30:50lot more often, too. Okay. And like we 5:30:53talked about, we have the share sizing 5:30:54formula. It's going to be your risk,5:30:57your dollar amount risk divided by your 5:30:59stop size. Okay? And in order to 5:31:03calculate stop size, just subtract your 5:31:06entry from your stop-loss price, right?5:31:10$3 minus 290. And how are we setting how 5:31:12where are we getting $3 and 290? Well,5:31:14remember the entry is over the base. The 5:31:17stop loss is under the base. So, when 5:31:19you see a base like this, draw a line 5:31:21over the base. See what price that is.5:31:24draw a line under the base, see what 5:31:26price that is. Okay? And we're going to 5:31:29be talking about share sizing and risk 5:31:31management. And we're going to go a lot 5:31:32deeper into this reward versus risk 5:31:36concept a little bit later in the 5:31:38course. Now, let's talk about the 5:31:41shakeout bar. And guys, I can guarantee 5:31:44you there is nobody else talking about 5:31:48this, okay? There's nobody else 5:31:50presenting this sort of information to 5:31:52you. The reason I say that is because I 5:31:54learned this by myself. I learned this 5:31:56through experience. Okay? And the 5:31:58shakeout bar is an incredible enhancer 5:32:03to the buy to the uh breakout. Okay?5:32:06This is something that I have just seen 5:32:09through my years of experience and 5:32:11through looking at thousands of 5:32:13different charts and looking at 5:32:14thousands of different breakouts and 5:32:16breakdowns. So the shakeout bar improves 5:32:20the quality of the base and it makes it 5:32:23a lot more potent of a base breakout or 5:32:26breakdown. This increases the odds of 5:32:30success for your breakout or your 5:32:32breakdown. And it makes the setup battle 5:32:36tested. That might sound confusing.5:32:39You'll understand it in a second. And 5:32:41what it does really is it makes a 5:32:44bullish base, right? Remember, if we 5:32:46have a bullish base at the highs of a 5:32:48rally, it's going to make that that um 5:32:51base even more bullish. It's going to 5:32:53it's going to kind of give you 5:32:54confirmation that this is definitely 5:32:57bullish. This is probably going to 5:32:58continue higher. And it gives a bearish 5:33:01base, right? That's basing at the lows 5:33:04of a rally. It's going to make it even 5:33:06more bearish. It's going to show you 5:33:08that there's actual bearish confirmation 5:33:11and it triggers stop losses. We're going 5:33:13to uh you know talk about that in a 5:33:15second. And like I said, it's a trading 5:33:17enhancer. It's a trade enhancer, right?5:33:19It makes me immediately more confident 5:33:21that this breakout is going to work or 5:33:23this breakdown is going to work. So,5:33:27let's look at it. So, in plain view,5:33:32this is the shakeout bar. And a shakeout 5:33:35bar, if you're looking at it, you might 5:33:36recognize it immediately. You might say,5:33:38"Hey, listen. That's a bottoming tail."5:33:41And you would be exactly correct. This 5:33:44is a just a bottoming tail. You're 5:33:46absolutely right. However, what does 5:33:48this bottoming tail do for us and what 5:33:51this bottoming tail does is picture when 5:33:54the as this breakout is forming, right?5:33:57Let's say a bunch of people have already 5:33:59entered the breakout, right? Or let's 5:34:01say a lot of people they're in it long 5:34:04from here, right? They bought it down 5:34:06here. They they haven't sold it here.5:34:07They're waiting to capture bigger 5:34:09profits. And let's say during this base,5:34:13all of those traders, all of those 5:34:15buyers, they set their stop losses. I 5:34:17mean, where I mean, they're going to set 5:34:18it under the base, right? That's that's 5:34:20where we're supposed to set it. We're 5:34:22supposed to set it under the lows of the 5:34:24base because that's where we have an 5:34:25area of support and that's where they're 5:34:27going to be setting their stop losses.5:34:31Now when this bottoming tail forms and 5:34:33right we know when when a bottoming tail 5:34:36forms it, you know drops in price before 5:34:40the buyers show up here and bring it 5:34:43right back up. Okay? So it shows us that 5:34:46the buyers are taking taking control.5:34:50And what this bottoming tail does,5:34:52right, as it's dropping, it's triggering 5:34:56every single stop-loss that is at this 5:34:59support level.5:35:01And by triggering all those stop-5:35:04losses, right, all those stop- losses,5:35:06they're sell orders, right? They're sell 5:35:07orders to try to get out of the 5:35:10position, right? As you're triggering 5:35:12all those sell orders, it brings the 5:35:14stock or crypto even lower, right?5:35:16Because if all of a sudden we trigger a 5:35:18bunch of sell orders, that's even more 5:35:21selling pressure. And as a result, we 5:35:23drop even more. But despite us dropping 5:35:28all the way out and you know breaking 5:35:30down out of this bullish base, if we end 5:35:34up rallying right back higher, that is 5:35:37confirmation that this stock or crypto 5:35:40is indeed bullish and we will continue 5:35:43higher. This is confirmation, right?5:35:45This is showing you that the buyers,5:35:47they're they're not allowing this stock 5:35:49or crypto to continue lower. No, as soon 5:35:51as it tried to drop, it went right back 5:35:54up. That is in essence what a shakeout 5:35:58bar h what a shakeout bar is. And this 5:36:00is when I say battle tested, meaning the 5:36:03sellers showed up. The sellers tried to 5:36:05bring this lower, but there was so much 5:36:08buying pressure that they brought it 5:36:09right back up and then it continued to 5:36:12base at the highs, right?5:36:14And this is a very bullish uh sign,5:36:19right? We want to we want to see this 5:36:21sort of bar when we are basing. Okay,5:36:24just it's the same idea here after a 5:36:27drop, right? We have an area of 5:36:29resistance 5:36:31over the highs of this base. And a lot 5:36:34of people are placing their their cover 5:36:37orders, right? Let's say people shorted 5:36:39it here, right?5:36:42um and they're enjoying their profits 5:36:44and now it starts to base and they want 5:36:45to capture additional profits. They 5:36:48place their stop-loss over the base as 5:36:50they should. And as soon as you know 5:36:54buyers start to show up and they trigger 5:36:57that stop-loss, a bunch of buying 5:37:00happens, right? Because that's where 5:37:01people are covering their shorts. So 5:37:03they're covering their shorts at this 5:37:05position and we see a rally higher.5:37:07However, it ends up just being a topping 5:37:10tail.5:37:11And remember guys, the topping tail 5:37:13suggests that that the sellers have 5:37:16taken control. So basically the buyers 5:37:19showed up. The buyers attempted to bring 5:37:22this stock or crypto higher. However,5:37:24the selling the sellers said, "Hey, not 5:37:27so fast." And there was so much selling 5:37:29pressure,5:37:31excuse me, that they brought the stock 5:37:33or crypto right back to the lows and it 5:37:36continued basing and then eventually 5:37:39finally break under this support and we 5:37:41continue lower. Okay?5:37:44And you can also call this kind of a 5:37:46breakout failure. You can call this a 5:37:48breakdown failure. It's a topping tail 5:37:51as well. So, this is why it's so 5:37:52important for you guys to understand 5:37:55um and be able to identify the different 5:37:58candlesticks that exist because you'll 5:37:59be able to find information like this 5:38:01where if you see, oh, oh wow, we have a 5:38:04a a topping tail during a a very bearish 5:38:08base, that's a good sign that we're 5:38:11that's that's good confirmation that 5:38:12we're actually going to continue lower.5:38:14Hopefully, that makes sense.5:38:16Now, let's talk about a breakout or 5:38:20let's talk about breakout and breakdown 5:38:22failures, okay? And a bullish base that 5:38:26has a breakout failure, which is a in 5:38:29other words, a topping tail, especially 5:38:32on high volume. And we haven't talked 5:38:34about volume yet, but this is when we're 5:38:36going to begin discussing it. Whenever 5:38:38we have a bullish base that has a 5:38:39breakout failure on high volume, that is 5:38:43a sign that a reversal to the downside 5:38:45might occur.5:38:47And with the opposite, let's say we have 5:38:49a bearish base, right, at the lows of a 5:38:52r at the lows of a of a um drop, right?5:38:57If we have a breakdown failure, which is 5:39:00a bottoming tail, right? We try to go 5:39:02lower, but we fail, especially on high 5:39:04volume. That's indicative that a 5:39:06reversal to the upside may occur. And 5:39:08guys, this is also information you're 5:39:10frankly not going to find anywhere else 5:39:12because this is this is these are 5:39:15strategies that I personally found 5:39:17through my years of experience. All 5:39:19right, so let's let's kind of uh walk 5:39:22through this. We're first going to be 5:39:24talking about the um breakout failure 5:39:27with the topping tail. So, we have a 5:39:29large rally and we begin to base at the 5:39:32highs, right? So far so good. All of a 5:39:36sudden, we break out, right? The buyers,5:39:39they bring this stock up or crypto up 5:39:42and we break out of the base. However,5:39:46this is very short-lived and then the 5:39:48sellers take control at the top here and 5:39:51they bring the stock or crypto right 5:39:53back down. Right? That's what a topping 5:39:54tail is. It suggests the sellers have 5:39:56taken control. So during this bullish 5:39:59base rally higher, we're basing 5:40:01bullishly. We're basing, okay,5:40:03everything's looking good higher. We 5:40:05finally break out, right? But ends up 5:40:08leading to a topping tail like this.5:40:12This is a breakout failure. And the 5:40:15market speaks loudest in its breakout or 5:40:18breakdown failures. It speaks loudest in 5:40:22its failure patterns. Right? So we we uh 5:40:26base we have a breakout 5:40:29leads to a topping tail. The breakout 5:40:31has failed especially if this is 5:40:33occurring on high volume. We're going to 5:40:34be talking about that more in the volume 5:40:36class. But this is usually indicative 5:40:38that that this move is done. This move 5:40:41is over. It attempted to break out and 5:40:44failed. What does that tell us? If it 5:40:46attempted to go higher and failed, it 5:40:48tells us, hey, this is probably going to 5:40:50go lower. And this is indicative that a 5:40:53reversal might take place and this will 5:40:55actually drop just like here. Let's say 5:40:59we have a excuse me let's say we have a 5:41:03[clears throat] drop in price. We are 5:41:05basing uh bearishly right we're basing 5:41:07at the lows which is uh some indicative 5:41:10of weakness.5:41:12We attempt to break down.5:41:14However, it leads to a bottoming tail.5:41:17Meaning, we we attempt to break down,5:41:19but we just shoot right back up, right?5:41:22Leading to a bottoming tail. What does a 5:41:23bottoming tail tell us? It tells us that 5:41:26the buyers have taken control. And it 5:41:28usually it's indicative of uh reversal 5:41:32and uh a reversal to the upside. Okay.5:41:35Well, I mean, and it's really not too 5:41:37difficult, guys. Think about it. If 5:41:38we're we're we drop we're basing it's 5:41:41looking lower. We attempt to go lower,5:41:43right? We attempt to break down and drop 5:41:46lower. However, the buyers show up here.5:41:48They bring prices right back up.5:41:51And you know, that usually means it 5:41:54might mean that we're actually going to 5:41:55end up reversing and continuing higher,5:41:57right? I mean, makes sense. We we try to 5:42:00go down, we fail, it probably means 5:42:02we're going up. If we try to go up and 5:42:04we fail, probably means we're going 5:42:06down. Okay.5:42:08So key characteristics about the 5:42:10breakout basing at the highs of a rally 5:42:14is bullish. If we make a rally higher 5:42:18and we're basing at the highs, that is 5:42:20bullish. It's a it's a it shows 5:42:22strength. It shows that there is 5:42:25positive buyers like there there's 5:42:27buying pressure. The longer it bases,5:42:32the more bullish it is. Okay? So, we 5:42:35want if if we're basing at the highs, we 5:42:37want a long base. We want [snorts] a 5:42:40base that's, you know, ideally longer 5:42:43than shorter because it shows that, hey,5:42:46this is just taking a little bit more 5:42:47time to correct itself, but there 5:42:50clearly aren't enough sellers to bring 5:42:52it down and make it break down out of 5:42:55the base. So, we're probably going to go 5:42:57higher. uh basing at the lows of a drop 5:43:00is bearish and the longer it bases at 5:43:02the lows, the more bearish it is. I 5:43:04mean, it makes sense. Okay, if it's at 5:43:06the lows and it's staying at the lows,5:43:09it probably means it's lower. If it's 5:43:11staying at the highs for a long time, it 5:43:13probably means it's higher. Um, basing 5:43:16at resistance 5:43:18is bullish and indicates a break of 5:43:20resistance may occur if the breakout 5:43:22triggers. Okay. So, if we are at a 5:43:26previous resistance point and we're 5:43:28basing at that resistance, it probably 5:43:31means we're going higher, right? Cuz if 5:43:33we're at a resistance level, right,5:43:35usually you would expect us to drop. But 5:43:37if it's basing at that resistance level,5:43:39it probably means we're going higher. If 5:43:41we're at a support level, right, and if 5:43:45you've already identified support on 5:43:47maybe the other time frames, um, if it's 5:43:50basing at support and it continues to 5:43:52base at support, then it probably 5:43:54indicates that, uh, a breakdown is 5:43:57probably going to happen and we're most 5:43:58likely going to continue lower. Okay.5:44:01And let's just want to make sure, okay,5:44:04let's just make sure uh, we look at some 5:44:06examples.5:44:07So, we have a rally. We begin to base.5:44:10We enter above the base. We [snorts]5:44:13enter. Oh, and now we have another base,5:44:15right? We We're going to enter at this 5:44:19red line which is over the highs of the 5:44:21base. Then we get that pullback. We we 5:44:24saw a diagram of this earlier where this 5:44:27prior resistance is now becoming 5:44:29support, right? And this is a buy setup.5:44:32We're going to talk about that in the 5:44:33next class. we rally higher and this is 5:44:36sort of a little bit of a base and 5:44:38another buy setup here. Okay, let's look 5:44:41uh here we have we had a rally before 5:44:44this. Um and another thing to note here 5:44:47guys, notice how the 20-day moving 5:44:48average is under price and it's trending 5:44:51higher. Okay? And we didn't quite I 5:44:54would never teach you guys anything that 5:44:55I don't personally use in my trading 5:44:58every single day. And what I'm about to 5:45:00show you is my personal favorite trading 5:45:04strategy. I literally trade this setup 5:45:06every single day in the markets 5:45:08ultimately because of its simplicity.5:45:11One of the reasons I am a profitable 5:45:13traders is because I like to keep things 5:45:15simple. I think the simplest things in 5:45:18life are oftent times the most brilliant 5:45:20in that 1,000% applies to trading. I see 5:45:23so many unprofitable traders out there 5:45:25that struggle because they over 5:45:28complicate their trading. They use fancy 5:45:30strategies, crazy indicators, they use 5:45:33those buy and sell markers on their 5:45:35charts and they just overcomplicate 5:45:37their analysis. And what I'm going to 5:45:39show you is a fundamental strategy that 5:45:42I guarantee you've heard of. I guarantee 5:45:44most traders have heard of this, but 5:45:46only a small percentage of traders 5:45:49actually succeed trading this strategy.5:45:52And I'm about to tell you why. And this 5:45:55setup, ladies and gentlemen, is, drum 5:45:57roll please, the base breakout, the base 5:46:00breakdown. And you might be thinking,5:46:01"Oh yeah, I've heard of breakouts and 5:46:02breakdowns. Maybe I even trade breakouts 5:46:05and breakdowns." And you might be 5:46:06thinking, "Oh, don't all base breakouts 5:46:09fail?" Like that's a common thing I 5:46:11always hear. Oh yeah, breakouts fail.5:46:12Well, yeah, there are thousands of 5:46:15breakouts and breakdowns that occur 5:46:17every single day in the markets, but our 5:46:20goal as traders is to only trade the 5:46:23highest quality of breakouts, right? The 5:46:26ones that are going to have a high 5:46:28reward to risk. They're going to be high 5:46:29probability. They're going to be high 5:46:31quality. And we want to avoid the low 5:46:34quality breakouts and breakdowns. And in 5:46:36this video, I'm going to explain exactly 5:46:39what to look for, what criteria to 5:46:41follow, how to identify highquality 5:46:45breakouts versus lowquality breakouts.5:46:47And this is ultimately what's going to 5:46:49make you profitable trading this 5:46:51strategy if you're able to find what's 5:46:54called amplifiers. And amplifiers are 5:46:57essentially, you know, criteria that 5:47:00make a specific setup higher quality.5:47:03And I'm going to go over every single uh 5:47:05amplifier for the breakout and the 5:47:06breakdown. But step one for trading this 5:47:09strategy is you need an established 5:47:12uptrend for a breakout and you need an 5:47:15established downtrend for a breakdown.5:47:17This is really, really simple, right?5:47:18What's an uptrend? Higher highs, higher 5:47:21lows, right? So what does the uptrend 5:47:23tell you? Well, uptrend tells you where 5:47:26prices are heading, right? And we as 5:47:29traders want to trade in the direction 5:47:32of the trend, right? You could be a 5:47:35reversal trader, but for the purposes of 5:47:37the strategy, we want to be trading with 5:47:39the trend. I mean, think about it. If 5:47:40you're driving on the freeway, on the 5:47:42highway, do you want to drive in the 5:47:44direction of traffic or do you want to 5:47:46drive against it? Well, if you drive 5:47:48against the flow of traffic, well, that 5:47:50could be very dangerous. The same thing 5:47:52with trading. If you trade against the 5:47:55trend, that could be very dangerous. And 5:47:57once you've identified that there's an 5:47:59uptrend or a downtrend, great. You need 5:48:02to understand why the breakout even 5:48:05exists, like what's the 5:48:08um concept behind the strategy. And to 5:48:11understand that, you need to know what 5:48:13price correction is and what price 5:48:15correction is within an uptrend or a 5:48:19downtrend. So, let's get into it. So, I 5:48:22want you to imagine that you just ran a 5:48:24marathon. Literally, imagine you just 5:48:26ran the New York City Marathon. What's 5:48:28that, like 25, 26 miles, right? Think 5:48:31about it. You just finished the 5:48:32marathon. Would you be able to 5:48:35immediately run another marathon? You 5:48:39So, you just ran 25 miles. Would you be 5:48:41able to run another 25 miles? Well,5:48:43unless you're David Gogggins, you need 5:48:46to rest. You need to sleep. You need to 5:48:49eat. You need to hydrate yourself. You 5:48:51need to relax. You need to, you know,5:48:53get some rest, right? And the markets 5:48:56move in very similar ways, right? Unless 5:48:59you're David Gogggins and you could just 5:49:01run marathon after marathon, you need to 5:49:03rest before you can run the next 5:49:05marathon. Well, the markets move in a 5:49:07very similar way. Whenever prices run a 5:49:10marathon or have a big rally, it can't 5:49:13just, you know, run up forever. They 5:49:15can't just move up, you know, like to 5:49:19infinity, right? Prices also need to 5:49:22rest. And you could think of this 5:49:24resting period as like a correction,5:49:27right? Prices need to correct before 5:49:30they can run the next marathon or before 5:49:32they can have the next rally higher,5:49:35right? And there are two ways in which 5:49:38prices can rest or correct. These are 5:49:41the only two ways. Either a retracement 5:49:44where the market runs a marathon and 5:49:47then it rests and corrects through a 5:49:50retracement. This is kind of like a buy 5:49:52the dip, right? That's the theory behind 5:49:54buy the dip, right? You get a big run up 5:49:57and we retrace, we correct, and then we 5:49:59get ready for the next marathon, for the 5:50:02next uh rally higher. The other way in 5:50:05which we can correct is through a 5:50:07consolidation, right? This is when you 5:50:10literally rest, right? The markets move 5:50:13up, they rally, and then they just stay 5:50:15at the same price. So the definition for 5:50:18consolidation is a period uh of time 5:50:22when the stock is trading within one 5:50:24particular range. It's not moving above 5:50:27that range. It's also not moving below 5:50:29that range. It is literally resting 5:50:32within that range. So these are the only 5:50:34ways in which prices can correct in 5:50:37which prices can rest. And you probably 5:50:39are already getting, you know, ideas of 5:50:41like, oh, I get this, right? Within an 5:50:43uptrend, prices are moving higher and we 5:50:46find corrections within an uptrend. And 5:50:48those are opportunities for us as 5:50:50traders. And you're absolutely right.5:50:52And that's what we're going to go over 5:50:53right now. In other words, by trading a 5:50:56retracement, by trading a consolidation,5:50:59in other words, trading a uh, you know,5:51:02correction pattern, you're trading the 5:51:05continuation of an established trend.5:51:08And in my opinion, that's the easiest 5:51:10way to make money with trading, to trade 5:51:12the continuation of an established 5:51:15trend. Always remember that the trend is 5:51:18your friend. And our goal is to spot 5:51:20retracements and consolidations or 5:51:23breakouts within established uptrends in 5:51:27order to make money. So hopefully you're 5:51:29starting to see this. And if you want to 5:51:32learn how to trade the retracement 5:51:33pattern, I actually teach it in my free 5:51:3610 plus hour course. You could find that 5:51:38in the description of this video. My 5:51:40free course is genuinely better than 5:51:43most paid courses on the internet. So,5:51:45it'll build the foundation for your 5:51:48trading and you could use a lot of what 5:51:49I teach in my free course in conjunction 5:51:52with my YouTube videos to solidify that 5:51:55trading foundation of yours and actually 5:51:57begin making money. So next uh what I'm 5:52:01about to talk about is very very 5:52:03important and that is your entry and 5:52:05your stop-loss for the base breakout for 5:52:08the consolidation which is what we're 5:52:10talking about in this video. And this is 5:52:12especially important because as traders 5:52:15it's important to have structure within 5:52:18your trading. I see so many traders out 5:52:20there who have random entries, random 5:52:23stop- losses, random targets, random 5:52:25execution, random management, and 5:52:27nothing in their trading is 5:52:28predetermined. They don't have 5:52:30structure. And yeah, I I see people 5:52:33online all the time that are like,5:52:34"Yeah, I'm entering here." And there's 5:52:36no reasoning behind that entry. So, with 5:52:39this breakout setup, you're going to 5:52:42know exactly where you're going to enter 5:52:44and where you're going to be placing 5:52:46your stop-loss. And theory behind the 5:52:49entry and stop loss is as the stock is 5:52:53basing and consolidating, right? You 5:52:56could think of the top of the base as 5:52:59like a resistance area, right? It kind 5:53:01of retests that top of the range and it 5:53:04retests the bottom of the range. So the 5:53:07top of the range is going to act as a 5:53:09resistance area within this 5:53:11consolidation. And the lows of this 5:53:14range, the lows of the base is going to 5:53:16act as a support area. And the reason 5:53:19that theory is important is because for 5:53:22the base breakout, we want to time our 5:53:25entry as prices are breaking out of that 5:53:29range as they're breaking through that 5:53:32resistance resistance which is, you 5:53:34know, at the top of the range. And we 5:53:36want to be placing our stop loss below 5:53:39the base, below the range. In other 5:53:42words, below the support area at the,5:53:45you know, bottom end of this base. So,5:53:48entry over the base, stop-loss under the 5:53:51base. That's just an easy way to think 5:53:53about it. It's extremely simple. And 5:53:56just having this entry and stop-loss 5:53:59model within your trading, it's you're 5:54:01already ahead of like 70% of traders who 5:54:03just operate completely randomly. So,5:54:06always remember you have a base 5:54:07breakout, entry over the base, stop-loss 5:54:11under the base. If it's the opposite, if 5:54:13it's a breakdown, it's entry under the 5:54:15base, stop-loss over the base. It's very 5:54:18easy, right? And with having a 5:54:20predetermined entry and stop, it's going 5:54:23to make your life a lot easier when it 5:54:25comes to risk management, which we're 5:54:27going to get into in a second here. So,5:54:29easy enough, entry over the base,5:54:31stop-loss under the base. All right.5:54:34Next, we have the 20 period moving 5:54:39average requirement. And I actually made 5:54:41a separate video a couple weeks ago 5:54:43about the 20 period moving average and 5:54:44how I use it. So, I recommend actually 5:54:46watching that video after you watch this 5:54:49one. But essentially for the 20 period 5:54:53moving average for the uptrend that 5:54:56we've already identified for this setup,5:54:59we want the 20 MA during the uptrend to 5:55:01be under prices, trending lower. We want 5:55:04a rise, I'm sorry, trending higher. So 5:55:06we want a rising 20 MA that's trending 5:55:09higher. Under price, trending higher,5:55:12under price, trending higher, under 5:55:14price, trending higher. That's what we 5:55:16want to see for the 20 MA, right? So we 5:55:17see this really nice uptrend. We want 5:55:19the 20 MA to be under price, trending 5:55:22higher. And if you watch the 20 MA 5:55:23video, you'll see how well prices 5:55:27respect the 20 period moving average 5:55:29within trends. And the opposite applies 5:55:31for a downtrend. The 20 MA is over price 5:55:35trending lower. And that's exactly what 5:55:37we want to see for a downtrend. Over 5:55:39price trending lower. All right. So 5:55:42opposite for an a uptrend. Next, our 5:55:46goal is to buy, look to buy when prices 5:55:51are close to or near the rising 20 5:55:55period moving average for a breakout.5:55:57Right? So, we have that initial rally,5:55:58the initial move up. At this point,5:56:00we're extended, right? If you watched 5:56:02the 20 video, you know we're extended 5:56:04from the 20 period moving average. You 5:56:07could think of this as we're overbought.5:56:09And from there, we need to rest. Prices 5:56:12need to correct in the form of a 5:56:14consolidation. And that's when we base,5:56:16we base, we base, we rest, we rest, we 5:56:18rest, we correct into that rising 20 5:56:21period moving average that is under 5:56:23price trending higher. And we want to be 5:56:26timing our entry with the consolidation 5:56:28with the base breakout when prices are 5:56:31close to or near the 20 MA. And this is 5:56:34exactly where we want to be timing our 5:56:36entry right here. All right, so easy 5:56:39enough. This is literally the only 5:56:41indicator I really use is the 20 period 5:56:43moving average and the 200 period moving 5:56:44average. Now the 20 MA, it's crucial for 5:56:48this breakout pattern. All right, so 5:56:50very important. You want that rising 20 5:56:52MA. You want to see it consolidate into 5:56:54that rising 20 MA or if it's a 5:56:56downtrend, you want to see it 5:56:58consolidate into the declining 20 MA.5:57:01All right. Now,5:57:03one extremely important factor when it 5:57:07comes to the base breakout or uh base 5:57:10breakdown is the quality of the 5:57:12consolidation.5:57:14We want to see tightly ranged 5:57:17consolidations. We want to see them 5:57:19tight. We want to see them almost like 5:57:20in a tight range. We don't want sloppy 5:57:23consolidations and we don't want a lot 5:57:26of bottoming tails or topping tails. And 5:57:28I'll show you what that looks like in a 5:57:30second. The tighter the base, the 5:57:33tighter the range of the consolidation,5:57:36the tighter the stop-loss, therefore the 5:57:38better the reward to risk. And I'm going 5:57:40to explain how that makes sense. Right?5:57:42So, what we want is a tight base here.5:57:45Let me kind of zoom in. Right? We don't 5:57:46want a sloppy base. We want a base 5:57:49that's tightly tightly ranging and then 5:57:51we trade the breakout. We don't want it 5:57:53to be, you know, all over the place. All 5:57:55over the place and then we trade the 5:57:57breakout, right? We want tight bases.5:57:59And this is why right it all comes down 5:58:03to your reward to risk. So right here we 5:58:07have two different consolidations, two 5:58:10different bases. This one is very tight,5:58:13very clean. It's not ranging all over 5:58:16the place. This one is the opposite. It 5:58:18is ranging all over the place. It's up,5:58:20it's down, it's up, right? So let's say 5:58:22our entry for both of these setups is 5:58:25$3, right? Over the base, $3 for both of 5:58:27them, right? However, let's say our stop 5:58:30loss for this tightly ranged setup is 5:58:33290. However, our stop loss for this,5:58:35you know, sloppy consolidation is 270,5:58:39right? Cuz it's a wider base. You're 5:58:41going to have a wider difference between 5:58:43the entry and your stop. If we're 5:58:46risking $100 on both of these trades,5:58:49right? What would be our sizing? And 5:58:51we're going to be using this formula,5:58:52which I talk about in other videos. It's 5:58:54essentially your risk divided by your 5:58:56entry price minus your stop-loss price.5:58:58This is how you size your positions.5:59:00This is how um how much how many shares 5:59:03you need to buy for that position. So if 5:59:06it hits your stop-loss, you only lose 5:59:08your predetermined risk. I talk about 5:59:10this in other videos as well and in my 5:59:12free course in the risk management 5:59:13section. So watch that, right? But let's 5:59:16say $100 risk divided by what's the 5:59:19difference between the entry and the 5:59:20stop, right? $3 minus $ 290, that's a 5:59:2310cent stop. $100 divided by 10 cents is 5:59:26a,000 shares. So for this breakout,5:59:28we're able to get a,000 shares. However,5:59:32in this case, since we have a wider 5:59:34stop, instead of it instead of it being 5:59:37100 divided by 10, right? $3US 270,5:59:41that's 30 cents. It'd be 100 divided by 5:59:4430 cents, which is 3.33 shares. You're 5:59:47risking identical amounts of money in 5:59:50these examples. You're both risking $100 5:59:52on both of these setups, right? It's an 5:59:55identical risk. the risk remains 5:59:57constant, but what changes is the amount 6:00:00of shares you can get. And this 6:00:02obviously has just a way better reward 6:00:05to risk. You're able to get more shares 6:00:08on the same risk because you have a 6:00:11tighter stop. And the reason you have a 6:00:14tighter stop is because you have a 6:00:15tighter consolidation. You don't have a 6:00:18sloppy consolidation like you do here,6:00:21right? This is why we want tight ranges,6:00:25tight breakouts versus, you know, crazy 6:00:27breakout uh crazy and sloppy breakouts 6:00:30like this. All right. And overall, when 6:00:32you have a tighter uh range, tighter 6:00:34consolidation, you end up getting way 6:00:36better continuation on that setup as 6:00:38well. So, that's also really important.6:00:40So, here are a couple of examples of 6:00:43very sloppy consolidations, right? Like 6:00:45you're seeing this, it's like up, it's 6:00:47down. Uh, let me get the different color 6:00:50here. But, and let me make it super 6:00:53thick. Uh, okay. You see it's up, it's 6:00:57down, up, down, up, down. Right. It's 6:00:59it's all over the place. You could see 6:01:00that during this bass. It's like sloppy.6:01:03Even during this, like we're up, then 6:01:05we're up. You know, it's it's not tight.6:01:07It's it's a very sloppy base. So, these 6:01:09are good examples of sloppy bases. These 6:01:13are good examples of what you want to 6:01:14avoid. Even right here, right? Let me 6:01:17get the black one out. Right here, you 6:01:19get the move lower, you retrace, and you 6:01:21see how sloppy it is. It's all over the 6:01:23place before you break down. Right? So,6:01:25in this case, the entry would have been 6:01:26below the base, stop-loss above the 6:01:29base. But that's such a big stop because 6:01:31it's such a sloppy setup. All right?6:01:34Does that make sense? So, in summary,6:01:36you want tight ranges, a tight 6:01:40consolidation for better reward to risk.6:01:43All right? Make sense? Now, let's go 6:01:45ahead and just look at some examples of 6:01:46this, right? So, that's the strategy,6:01:48right? We got the 20 MA requirement. We 6:01:51know where our entry is. We know where 6:01:52our stop loss is. And we know we want 6:01:54tight ranges, tight consolidations.6:01:56Let's take a look at some examples here.6:01:57All right. So, this first example is 6:01:59actually Ethereum. And this was 6:02:01literally just a few weeks ago. Take a 6:02:05look at this breakout right here. So,6:02:07Ethereum was on a multi-month downtrend.6:02:10And then all of a sudden, we bottomed 6:02:12here. Then we based and then we kind of 6:02:15had that initial breakout over the base.6:02:17But this wasn't the interesting one.6:02:19This was the interesting one. So we move 6:02:22up and then we consolidate. We 6:02:24consolidate. We consolidate right into 6:02:26that rising 20 period moving average and 6:02:28then we pumped like 40% on Ethereum. And 6:02:32you could see how tight of a range this 6:02:35is. It is such a tight base. So that's 6:02:38where your entry would go. It'd be uh 6:02:40over the base. You could put your entry 6:02:41here or over the base here. Stop loss 6:02:44under the base right here. And that 6:02:46would be your entry and your stop. An 6:02:48unbelievable breakout opportunity.6:02:50Literally on Ethereum. Almost picture 6:02:52perfect breakout on ETH. And I was 6:02:55actually buying a ton of it throughout 6:02:57this entire area. I'm very very bullish 6:02:59on ETH, not only uh from a price action 6:03:02perspective, but long-term as well.6:03:04Here's another really really good 6:03:05example. All right, on APLS, we kind of 6:03:09started to, you know, we moved down a 6:03:11little bit and then we started to uh 6:03:12base base base base into the rising 20 6:03:15period moving average. I think this was 6:03:16on a gap up uh which I'll talk about in 6:03:19a second. So, this thing gapped up and 6:03:20then just consolidated and really really 6:03:23clean entry over the base, stop loss 6:03:25under the base and you would have caught 6:03:26that move. Very very nice. Let's move 6:03:28on. Uh this is another really really 6:03:31beautiful setup. I mean, take a look at 6:03:33how tight the base is. Not sloppy at 6:03:36all. Like right here, right? Take a look 6:03:38at this. We dropped, we retraced. So,6:03:41it's kind of like a retracement pattern 6:03:42as well. And then we consolidated,6:03:45then entry below the base, stop loss 6:03:47above it, right? Beautiful, beautiful 6:03:50breakdown, right? You know, maybe not 6:03:52right into the 20 period moving average,6:03:54but remember, it doesn't have to be 6:03:56exactly at it. Just has to be near the 6:03:5820 MA. And I consider this pretty near 6:04:00the 20 MA. So, excellent, excellent 6:04:02setup. I actually made money on this 6:04:03one. So, all these trades are trades 6:04:05that I've taken before. Here's another 6:04:08really, really excellent example. Um, as 6:04:11well, check this out. Consolidation 6:04:14breakdown right into the 20 MA, entry 6:04:17under the base, stop-loss below. Then,6:04:20we dropped consolidation right into the 6:04:2220 MA. We got a breakdown, entry below 6:04:25the base, stop-loss above. And that 6:04:27thing just just I mean from what 90 from 6:04:30what 90 bucks all the way to like $63.6:04:34Insane move, right? And it's simple,6:04:36right? We're essentially just trading 6:04:38the continuation of the trend in a 6:04:40really really intelligent way, right?6:04:43Let's look at uh an example actually 6:04:45from yesterday's trading. So let me 6:04:48point exactly where this was. So this is 6:04:50the five-minute chart. And a lot of 6:04:52people might be wondering, hey, what 6:04:53time frames do you use for the breakout 6:04:56breakdown? It's all about using multiple 6:04:58time frames. I'm probably going to make 6:05:00another YouTube video about this, but 6:05:01it's not about using one time frame.6:05:02It's about uh practicing multiple time 6:05:06frame analysis, and you are looking for 6:05:08multiple time frame alignment. So, um if 6:05:11you look at it, this was around 12:00.6:05:13It started to base, right? So this thing 6:05:15dropped the entire day and then kind of 6:05:18you know did some sloppiness right here 6:05:21but then it started to drop and then it 6:05:22started to actually consolidate really 6:05:24fluidly. Now this was on the 5m minute 6:05:27time frame. So this kind of set the bias 6:05:30here right the 15 and the five set the 6:05:32bias that this was downtrending and then 6:05:34right here between 12 and 12:30. So this 6:05:37area right here I actually screenshotted 6:05:39the one minute chart. It was between 6:05:42right here all the way to right here.6:05:43You could see on the one minute chart.6:05:46Look at how well prices are respecting 6:05:49the 20 MA. And check this out. We have a 6:05:51base breakdown. We based right into the 6:05:5420 MA. Slight small little breakdown.6:05:56Continued to base. Small little 6:05:58breakdown. Continue to base. Small 6:05:59breakdown. And then that and then this 6:06:01is where it really accelerated where it 6:06:03based. Look at this. Such a tight base.6:06:05It wasn't like this. It was literally 6:06:07like a very very tight base and then 6:06:09breakdown, right? very tight bass 6:06:11breakdown then based again breakdown 6:06:15braced again breakdown based again 6:06:17breakdown. This is what I call a stair 6:06:19step where you drop base drop base drop 6:06:23base drop. Um or the opposite where you 6:06:25go up base go up base go up base go up 6:06:28base. This is a stair step. If you ever 6:06:30see a stair step, it's literally some of 6:06:32the easiest money that you can make in 6:06:34the markets. Seriously. Um and 6:06:36unfortunately I actually missed out on 6:06:38this. I was away for lunch at 12:00 and 6:06:41I only came back at like 12:45, not even 6:06:43at 12:50, so I I was already late to the 6:06:45move, but unbelievable 6:06:48uh setup, honestly. Unbelievable. And 6:06:51this was literally yesterday, right? So,6:06:52it's important to look at multiple time 6:06:54frames. And yeah, just beautiful. You 6:06:57know, you can see how well it's 6:06:58respecting the 20 MA. And and this is 6:06:59what I do every single day. I find 6:07:01established trends and then I find 6:07:03breakouts and breakdowns within trends 6:07:05by using the 20 MA uh by of course 6:07:08looking for really really quality 6:07:10setups, tight bases and then from there 6:07:14um I'm looking at multiple time frames 6:07:16and I'm also using level two which I 6:07:18teach in other videos. So yeah, and this 6:07:21is exactly how I do it. Now there's also 6:07:24another very very key amplifier that you 6:07:27could use when you combine these setups 6:07:30with gapping stocks. Now what is a 6:07:32gapping stock? That is an overnight 6:07:34change in price. So a stock, you know,6:07:38uh closes at $5 yesterday and then the 6:07:41next day it opens at $8. That $3 6:07:43difference overnight is a gap. It's an 6:07:46overnight change in price. You could 6:07:47literally see the gap in the chart. And 6:07:49I trade gaps. I'm a day trader. I love 6:07:51trading gaps and the gap sets the bias 6:07:55and then from there I usually trade that 6:07:57bias uh through a breakout on the 6:08:00intraday time frames which I'm going to 6:08:01show you a bunch of examples in just a 6:08:03moment. And 80 80 to 90% of the time I'm 6:08:07trading in the direction of the gap.6:08:09There's this idea that all gaps fill.6:08:11Everyone will tell you that. Oh yeah,6:08:12don't trade gaps. All gaps uh ultimately 6:08:14fill. Maybe long-term you could find me 6:08:16a statistic saying that all gaps 6:08:18ultimately fill the gap, you know, over 6:08:20a course of a year or two. But in terms 6:08:22of the day of the gap, yeah, there are 6:08:24some gaps that fill, but there are 6:08:26there's a ton that follow through and 6:08:29continue with the gap like crazy. I've 6:08:31been trading gaps for 5 years. This idea 6:08:34that all gaps fill and that you should 6:08:36not trade gaps, that is nonsense. It is 6:08:38 I'm going to show you examples 6:08:40of it right now. I trade gaps for a 6:08:42living. I trade the continuation of 6:08:44gaps. Meaning, if it gaps up, there's an 6:08:46overnight change in price to the upside.6:08:49I usually go in the direction of that. I 6:08:51go long during the intraday. Or if it 6:08:53gaps down, overnight uh change in price 6:08:55to the downside, I usually go in the 6:08:57direction and I'll look to go short. I 6:08:59do this 85% of my setups are that. So,6:09:02that is that all gaps filled.6:09:04Not true. It's a myth. So, and this is 6:09:06what I do. The gap establishes a bullish 6:09:08bias if it's gapping up on the higher 6:09:10time frames. And then I trade that bias 6:09:13on the intraday time frames via a 6:09:15breakout or a breakdown. And the reason 6:09:18gaps occur is because of news, earnings,6:09:21events within the company. There could 6:09:22be all sorts of reasons and why prices 6:09:24change overnight. I'm not really 6:09:26concerned with the reason. I'm concerned 6:09:28with what that gap is doing to price. I 6:09:30actually have another video on my 6:09:32YouTube channel. Uh, this strategy is 6:09:33boring but makes me 50k a month. That 6:09:36video goes over gaps and I go over how I 6:09:38combine gaps with this strategy as well.6:09:40So, let's go over a couple from the last 6:09:42few days. So, I've had people comment 6:09:44under my videos saying that I cherrypick 6:09:47specific charts from like years ago 6:09:49that, you know, perfectly represent the 6:09:51ideas that I am teaching. But all the 6:09:54stocks that I'm about to show you are 6:09:55ones that I've either made a lot of 6:09:57money on over the last literally like 6:09:59two to three weeks or stocks that were 6:10:02on my watch list. They were on my radar 6:10:04and maybe I just missed them. But most 6:10:06of these stocks I actually traded and 6:10:08made money on. The first one was open.6:10:10And I use the replay function just to uh 6:10:14make it less confusing and kind of go 6:10:16back to the specific day which this 6:10:18happened which was on May 9th which was 6:10:21just a couple of weeks ago. So open 6:10:24closed at 87 cents the previous day. The 6:10:27next morning it gapped and opened at 6:10:29around.7 cents 69 cents directly below 6:10:32this downtrend below support below into 6:10:36all-time lows. So since we were clearing 6:10:38support and gapping down that gave me a 6:10:40bearish bias. And then if you go to the 6:10:43five-minute chart you see just a few 6:10:45picture perfect breakdowns here. So, at 6:10:47first it actually got bought, then kind 6:10:49of settled down, and my first entry was 6:10:52right here, caught this move lower, and 6:10:54then I exited, took profits, and then I 6:10:57started shorting it again right here on 6:10:58this base. Dropped, based, and then look 6:11:01at this flush lower. This was my biggest 6:11:03trade on that day. I think this made me 6:11:06in total $4,600, something like that.6:11:09Insane breakdown. It was beautiful at 6:11:11the time. And this was on such a tight 6:11:14stop. Literally, it was a penny stock 6:11:16and there was no spread. This the the 6:11:18stop was like 0.00002.6:11:21It was like insanely tight. So, I got 6:11:23massive size. I had like 100,000 shares 6:11:25in this thing. All right. So, this was a 6:11:27really really perfect example of that.6:11:29Here's another fantastic example on 6:11:32Coinbase. This was on May 13th, and this 6:11:36was actually my biggest miss of the 6:11:39week. I got shaken out of this trade and 6:11:42I wasn't able to fully capitalize on it.6:11:44I will be transparent. It h it made me 6:11:48it was just crazy. It was crazy. I 6:11:55Okay, this 6:11:58Okay, this next one is on Coinbase and 6:12:01this was on May 13th and this was an 6:12:04unbelievable 6:12:06play that unfortunately I will be 6:12:07transparent. I missed out on I 6:12:09mismanaged this and I wasn't able to 6:12:11capitalize. But take a look at this. We 6:12:13bottomed around 144. Then we started to 6:12:16kind of chop around. We had that rising 6:12:1720 MA. We closed at 206 the previous day 6:12:21and the next day we gapped up around 12%6:12:24which for Coinbase it's a $200 plus 6:12:26dollar stock. That's pretty significant.6:12:28We gapped above this entire resistance 6:12:31area. Right. So let me get the tool. We 6:12:34gapped above this entire resistance and 6:12:36we also gapped above the 200 period 6:12:40moving average and we had just I mean we 6:12:43had no resistance until literally like 6:12:45probably this pivot even. It could have 6:12:46even gone higher. We had literally 6:12:48absolutely no resistance. It was an 6:12:50amazing gap up. So I saw the gap and 6:12:53this gave me a bullish bias. Then you go 6:12:56to the intraday time frames. Let's say 6:12:58the five minute chart and you could see 6:13:00just a beautiful breakout right here.6:13:04You could have played over the highs 6:13:07stop loss below and what that's at 240 6:13:11250 entry 238 6:13:15uh stops. It's like a $4 stop and this 6:13:17thing ran to 260. So, it's like four or 6:13:19five RS and you could have even used a 6:13:21tighter stop as well. And in fact, there 6:13:24was an earlier entry on it right here.6:13:26You could have said that, hey, rallied 6:13:29based a little bit. I remember I called 6:13:31this out in my group. I had a bunch of 6:13:32students that printed on this, but I I 6:13:34mismanaged it. Anyway, that's fine. I 6:13:37know exactly what I did wrong, but you 6:13:38could have uh entry over this base, stop 6:13:41loss above. Oh, I'm sorry, a stop loss 6:13:43below. So, entry over the base, stop 6:13:45loss below, and then you could have even 6:13:47added to it over this base and then 6:13:49moved your stop loss up. So, it was a 6:13:51fantastic, fantastic example. And you 6:13:54could even see how well prices were 6:13:56respecting the 20 MA on the pullback on 6:13:58the retracement right here, here, here.6:14:01It was just, it was an amazing just 6:14:03power trend that day, ignited by the 6:14:05gap. So, the gap gave me the bias and 6:14:07then we traded the bias of that gap via 6:14:10a breakout on the intraday time frames.6:14:13Here's another unbelievable gap and 6:14:16example. The previous day we closed at 6:14:18232. Um, and then the next day we opened 6:14:21at 188. So, what this was like about a 6:14:2420% gap and we were gapping directly 6:14:28below the all-time lows, directly under 6:14:31support. We were gapping directly below 6:14:33this move higher. It was beautiful on 6:14:36this DCGO. I think I used this example 6:14:38in the other video just because it's a 6:14:39picture perfect gap and it was a really 6:14:43nice setup on the intraday time frames 6:14:45as well and I was able to capitalize. I 6:14:46don't remember exactly how much I made 6:14:48but it was I remember I made at least I 6:14:50think it was 1 to 2,000 something like 6:14:51that. Um and and you could see the 6:14:54breakdown 6:14:56uh right here where we dropped then we 6:14:59kind of retraced moved back in and then 6:15:01we had a breakdown setup right here.6:15:02It's probably a little bit cleaner on 6:15:04the 15. You could probably see it a 6:15:06little bit better. Yeah. So, we dropped,6:15:08we based, and I remember this stock, it 6:15:11was hard to get filled on a lot of the 6:15:13times, but um entry below the base, stop 6:15:16loss above the base, right? And I think 6:15:18there was an even um there was another 6:15:22base breakdown, the smaller time frame.6:15:24Yeah, the first one. It's going to look 6:15:25really weird on Trading View on my 6:15:27ThinkersW platform. It looked a lot 6:15:29cleaner. It's going to look super wild.6:15:31It didn't look like this on thinker 6:15:32swim, but uh that was actually my first 6:15:34setup on it. I um stop loss here and 6:15:38then entry under the base and then we 6:15:40caught that move lower um in my group 6:15:42and that was fantastic. That was a 6:15:44fantastic uh play. So, same thing uh 6:15:46unbelievable daily gap down which set 6:15:49the bias that it was going to go lower,6:15:51bearish bias and then we traded that 6:15:54bias on the intraday time frames via a 6:15:5715minute and uh 2-minut breakdown. This 6:16:00video is getting long, so I'll do one 6:16:02more. And this was on Wolf. This was my 6:16:03biggest trade last week. Um, I remember 6:16:06distinctly because it was pretty 6:16:08recently. This was May 21st. So, it was 6:16:10only like a week ago, literally. Um, so 6:16:14I made I think $5,600 off the wolf. And 6:16:17by the way, I post all my results every 6:16:19single day on my Instagram story as 6:16:21well. So, I highly recommend following 6:16:22me on Instagram to see my daily P&L. Um,6:16:25so this thing gapped down a lot. It 6:16:27gapped from what 312 all the way to like 6:16:31110. It was like a 60% plus gap. I call 6:16:35this kind of like a mega gap where it's 6:16:38a massive massive gap. And whenever you 6:16:40have massive gaps like this that are,6:16:42you know, 60 70 plus% they can actually 6:16:45go either way, right? I usually would 6:16:48have a bearish bias on a gap down, but 6:16:50when you have a really big gap down 6:16:53that's really under support, right? like 6:16:55this was super under support. Um you it 6:16:58could actually get bought. So we'll go 6:17:00to the intraday time frames and you're 6:17:02not going to see this cuz I did it off 6:17:03uh off level two as a scalp, but off the 6:17:06morning I got 5K shares at 110,6:17:09stop loss 115. So I was only risking 6:17:11like 250 bucks and I was able to kind of 6:17:15manage this and I took profits around n 6:17:17around um what was it around 92 cents.6:17:21So, off my first trade on it, I made 6:17:23like 750 bucks off level two and I kind 6:17:25of scalped it lower and held it and took 6:17:28profits around here. But the real trade 6:17:30in the breakout was right here. So, this 6:17:33thing dropped. It ended up bottoming at 6:17:34around 82. Um, I was scalping this on 6:17:37the way up, but off level two, but that 6:17:40wasn't the real trade right here. We 6:17:42moved up. We started to base. We started 6:17:43to base. Rising 20 period moving 6:17:46average. Entry above the base. Stop loss 6:17:49below the base. And I actually sized up.6:17:51You know, I my risk is definitely 6:17:52discretionary. Uh sometimes I size up on 6:17:55really really um high quality setups. I 6:17:58sized up on this one. It also had a 6:18:00really nice level too. So I got in 6:18:02around 103 104 something like that. I 6:18:05think my uh by the end of it my average 6:18:07price was 105. I had like 25,000 shares.6:18:10I sized up um and I got in using level 6:18:13two as well. Uh but the entry here is 6:18:15really breakout entry above the base 6:18:18stop loss below and I caught um this 6:18:21move higher. My first exit I remember 6:18:23was at 118. So I had 25,000. I took 6:18:26profits at 118 and then you see this 6:18:28little tail right here. We got back in 6:18:30off level two [snorts] scalping it and 6:18:32there was a a retracement on the 6:18:34intraday time frame. So, we got back in 6:18:36at 112, rode it to 125, and then I think 6:18:39we had one more move on it, but by the 6:18:42time it hit 140, I was more or less out 6:18:45of my full size. And this was a 6:18:47beautiful breakout as well. So, the idea 6:18:49here is we use gaps to set the bias and 6:18:52then we trade that bias via the breakout 6:18:56or breakdown on the intraday time 6:18:58frames. Hopefully, this makes sense.6:18:59Video is getting a little bit long,6:19:00guys. Hopefully, you know, you could 6:19:02begin applying this in your trading and 6:19:04use all of these things. So, in summary,6:19:06we used the gap. We looked at a bunch of 6:19:07examples of really clean base breakouts,6:19:10right? We don't want to see sloppy 6:19:12bases. We want to see clean, tight 6:19:14ranges because they give you a better 6:19:15reward to risk and it also gives you 6:19:18better follow-through. The less sloppy,6:19:20the better it is, right? Um, so that 6:19:23that's what this covers. And then from 6:19:25there, we used the 20 MA to our 6:19:26advantage. Watch the 20 MA video. We 6:19:28want it under price trending higher for 6:19:30an uptrend. We want to see prices 6:19:32consolidate into the rising 20 MA. And 6:19:35of course, you understand the whole 6:19:36price correction thing. It's a very,6:19:38very simple strategy. Like, you're 6:19:39probably looking at this video like,6:19:40"Yeah, this is really simple. This is 6:19:42what I do every day. This is my by far 6:19:44my most profitable strategy, and it's 6:19:46the first one that my dad taught me."6:19:47All right, guys. So, very good. Make 6:19:50sure you like, make sure you subscribe,6:19:51make sure you leave a comment if you 6:19:52enjoyed this video. And I actually am a 6:19:55little bit sick. It took me like a few 6:19:56hours to record this video. Um, I'm a 6:19:58little sick, but hopefully you really 6:20:00enjoyed it. And if you're someone who's 6:20:01looking for a hands-on mentor, you want 6:20:03to trade live with me every single day,6:20:05you want me to take you under my wing,6:20:07teach you from A to Z, and scale you 6:20:09from zero to$10 to $50,000 a month with 6:20:11trading, that is exactly what I do with 6:20:13my mentorship students. I scale and 6:20:15coach them to become profitable traders 6:20:17and ultimately full-time traders. That 6:20:19is the purpose of the mentorship is for 6:20:21you to change your career and become a 6:20:23full-time trader. and I help you do 6:20:25that. I'm very selective with who I work 6:20:27with. So, if you're interested, if you 6:20:29want more details, if you're really 6:20:30looking to take that next step in your 6:20:32trading, uh there's an application 6:20:34below. There's also a video in there 6:20:35that'll give you all the details. You 6:20:37could apply, book a free call. No 6:20:39pressure. We'll see if it's a good fit 6:20:40for you. Um hopefully you guys enjoyed 6:20:42this video. Thank you very much. I'll 6:20:44see you in the next one. What is going 6:20:46on, guys? Glad you're watching this 6:20:47class. And today we're going to be 6:20:49talking about the buy setup and the sell 6:20:53setup. In other words, the pullback or 6:20:56retracement pattern. And I know we 6:20:59talked about the base breakout and the 6:21:01base breakdown during last class. And I 6:21:03believe the stream cut off uh while I 6:21:06was actually looking at some examples.6:21:08So I want to go ahead and finish the 6:21:10examples that we were looking at before 6:21:12we continue on into the buy setup. Okay.6:21:15So let's go ahead and do that. Um, okay.6:21:18Play from current slide. So, we talked 6:21:19about this example.6:21:21So, looking at this example, number 6:21:23number one, the 200 day moving average 6:21:25is under price. It's under the 20-day 6:21:28moving average. That's a bullish sign.6:21:31You usually you usually want to see the 6:21:33200 generally under price, right? You 6:21:35want the average uh the 200 day moving 6:21:39average to be below price and the price 6:21:42to be above that average. Okay. Um, we 6:21:45had a a prior rally here and we ended up 6:21:48basing, right? Our entry is above the 6:21:51base. Our support is or our stop loss is 6:21:56under the base. And notice that as soon 6:21:58as we begin to break out or right before 6:22:01we actually begin to break out, uh, the 6:22:0320-day moving average starts curling 6:22:05under and trending higher under price.6:22:09Okay? And that's when we start to see 6:22:11the breakout. And we're going to be 6:22:12talking about the buy setup today. Uh 6:22:15same thing here. 200 is all the way 6:22:17below price and below the 20. We have 6:22:20the 20-day moving average. Notice that 6:22:22as soon as it starts to break out here,6:22:25it starts to rise under price. It's 6:22:28trending higher, right? You could see 6:22:31that there's clearly bullish momentum 6:22:33with the 20-day moving average. And as 6:22:35soon as we base into that 20-day moving 6:22:37average, that's when we break out. Okay.6:22:40So our our u entry would be over the 6:22:43highs, stop loss would be under the 6:22:45lows. Okay, hopefully that makes sense.6:22:48So those are just some examples of it.6:22:50And um later in the course, we're going 6:22:52to be looking at some charts and 6:22:54actually pinpointing different 6:22:55breakouts, different buy setups, and 6:22:58also looking at other the other patterns 6:22:59that we're going to be talking about. So 6:23:02let's go into the buy setup. And the buy 6:23:06setup as you may recall is the one of 6:23:08the other fundamental strategies that I 6:23:10talked about. We talked about how price 6:23:12tends to correct itself in two ways.6:23:15Either through time or in other words 6:23:17you know base it consolidating. We we 6:23:20already learned about that last class.6:23:22Um now we have to understand that price 6:23:24can also correct itself through a 6:23:26pullback through a price correction.6:23:29Okay. So what is it? And this is 6:23:33ultimately correctly buying the dip. We 6:23:35always hear that phrase buying the dip,6:23:39right? I think it was coined in 2020 um 6:23:42when you know all stocks went up, all 6:23:44cryptos went up during the COVID 6:23:46pandemic, right? Or after it. Um and a 6:23:49lot of people, frankly, they lose money 6:23:52when they buy the dip. Most people, most 6:23:55amateurs, they lose money when they're 6:23:57buying the dip. But what I'm going to 6:23:58show you today is how to correctly do 6:24:00it. what characteristics you should be 6:24:02looking for when you're actually buying 6:24:04the dip. Because I'm making money buying 6:24:07the dip. I know other traders making 6:24:09money buying the dip. There's no reason 6:24:11reason you shouldn't be making money 6:24:13when buying the dip. And I'm going to 6:24:15show you exactly how to do that. This is 6:24:17one of the most potent uh trading 6:24:19strategies for day and swing trading. It 6:24:22works on any time frame for any stock,6:24:26crypto, forex, any financial instrument 6:24:28that operates in a market. And it's 6:24:30really important to develop the skill 6:24:32set required to identify when to be 6:24:36buying the dip, right? When or or 6:24:39identifying what is a high quality buy 6:24:42setup or pullback pattern.6:24:45So like we did with the base breakout,6:24:47let's try to analyze the anatomy of the 6:24:50base breakout. I'm sorry, of the of the 6:24:53buy setup. Sorry about that. So, number 6:24:55one, we have a rally, right? A lot of 6:24:58the people people who bought it down 6:25:00here, they want to start taking profits.6:25:03So, what they do is they start selling,6:25:05right? They sell at this point and we 6:25:06see a minor pullback. What we want to do 6:25:11and during this pullback actually um 6:25:14this is price correcting itself, right?6:25:16That's why it's pulling back. But what 6:25:19we want to do is time our entry for when 6:25:22the pullback and the correction is 6:25:25finished. So we buy here and enjoy the 6:25:28next move higher. Again we begin the 6:25:31pullback. We want to you know we want to 6:25:34buy when the correction and the pullback 6:25:35is finished and enjoy the next move 6:25:38higher. Okay. Uh also guys for the buy 6:25:41setup this is kind of a big uh you know 6:25:44this is a requirement. You need to have 6:25:46an established uptrend in order to trade 6:25:50the buy setup. You need an established 6:25:53uptrend, especially if you're a 6:25:55beginner. Make sure there is a present 6:25:58uptrend before you consider 6:26:02uh playing the buy setup. And the buy 6:26:04setup, of course, occurs after the 6:26:06pullback has completed right here.6:26:10So let's go over some key criteria 6:26:14for the buy setup. And ultimately the 6:26:16buy setup really we're buying after a 6:26:19pullback, right? So following a rally 6:26:22higher, right? You want to have three or 6:26:27more consecutive 6:26:30red bars in a row and you want to have 6:26:33three or more consecutive lower highs in 6:26:37a row on the pullback. Right? So right 6:26:39now we're trying to analyze the quality 6:26:43of the pullback, right? We need we want 6:26:46to be looking for specific types of 6:26:48pullbacks when we're um analyzing a buy 6:26:52setup. Okay? So one of the criteria is 6:26:55like I said just now it you have to have 6:26:57three or more consecutive red bars,6:26:59right? We have a red bar, red bar, red 6:27:01bar, red bar. We have four in this case.6:27:03Perfect.6:27:04And we you also ideally want to have 6:27:07three consecutive lower highs, right?6:27:09What what does that mean? Right? We have 6:27:10this is a high of this red candlestick.6:27:13Then this is the next high of the next 6:27:15candlestick. This is the next high of 6:27:17the next candlestick. And this is the 6:27:18next high. Right? Notice how every high 6:27:20is lower than the previous one. Notice 6:27:23also how every low is lower than the 6:27:26previous low. That's what we want to 6:27:27see. We don't want to see we're down,6:27:29then we're up, then we're down, then 6:27:31we're up, then we're down. We don't want 6:27:32to see that. We want to see three red 6:27:34bars in a row and ideally uh consecutive 6:27:37lower highs and lower lows. Okay,6:27:40key criteria number two. This one is 6:27:44very important. We want to make sure 6:27:47that the 20-day moving average is 6:27:50trending higher and under price. Okay, I 6:27:55can't emphasize this enough, guys. I 6:27:57keep talking about the 20-day moving 6:27:59average because it is extremely 6:28:01important, especially for this setup,6:28:04okay? We want it to be trending and 6:28:07under price. And you're you guys are 6:28:10actually going to notice that price 6:28:11tends to retrace and it tends to pull 6:28:14back right into the 20-day moving 6:28:17average. Okay, key criteria number 6:28:20three, we have to look at the 6:28:24retracement of the pullback. The 6:28:26retracement is the amount that a stock 6:28:29pulls back, right? It's the measure of 6:28:31the amount or the, you know, I guess you 6:28:34could say the uh yeah, I guess you could 6:28:36say the amount of the pullback or how 6:28:38large the pullback is. That's what the 6:28:39retracement is. And we want to be 6:28:42looking for a 40 to 60% retracement of 6:28:45the prior rally. Meaning, let's say from 6:28:49the lows of this rally to the highs of 6:28:52this rally, that makes up 100%.6:28:54We want this pullback to be in the 40 to 6:28:5960% region of this rally, right? So,6:29:04let's see. I would say this is about 6:29:0760%.6:29:09I would say this pulled back to around 6:29:10the 60% point, right? So, in general,6:29:13you want it to be in this area right 6:29:14here. That's between I would say 40 to 6:29:1860% of this rally with 50% being around 6:29:21right here. Okay? And the whole point of 6:29:24this is you don't want a really deep 6:29:26retracement, right? Like let's say after 6:29:28this rally you retrace all the way down 6:29:30here. That shows weakness, right? If 6:29:34we're really that bullish, if we're in 6:29:36an uptrend, if there's a lot of buying 6:29:38pressure, why would we retrace all the 6:29:40way back to close to the lows of the 6:29:43rally? That shows a lot of weakness.6:29:46Furthermore, if we retrace 6:29:49um you know under 40% retracement,6:29:51meaning we retrace to only right here,6:29:53well, that shows lack of price 6:29:55correction because we're still going to 6:29:57have significant distance between price 6:29:59and the 20-day moving average, right?6:30:01So, we want to have that golden spot of 6:30:0340 to 60% retracement of the prior 6:30:06rally. Okay, hopefully that makes sense.6:30:10Key criteria number four, let's talk 6:30:13about the entry, stop-loss, and targets.6:30:17So, first step is to identify the entry 6:30:20bar and wait for it to completely form.6:30:23We're going to be discussing entry bars 6:30:25on the next slide. But for right now,6:30:28this is our entry bar. Okay. So, as soon 6:30:31as this entry bar has finished forming,6:30:34what we're going to do is put our place 6:30:36our entry above the entry bars high,6:30:40right? Like that's the whole point of 6:30:42the entry bar. This is where we base our 6:30:43entry off of. You want to put it over 6:30:46the entry bars high and you want to put 6:30:49the stop loss under the entry bars low 6:30:52or under the rising 20-day moving 6:30:55average.6:30:56Okay. So, basically, once this bar is 6:31:00finished forming and the buy setup, like 6:31:04you see that there's a buy setup, you're 6:31:06going to want to just place your entry 6:31:07right above the highs of this bar and 6:31:10place your stop loss once you're in the 6:31:11position under the lows of that candle.6:31:14So, you would be entering during this 6:31:16green bar as soon as it hits this entry 6:31:20and you would enjoy the move higher.6:31:22Okay? And your target one is the 6:31:25previous high, right? So we rally, we 6:31:28make a high, right? This is a pivot high 6:31:30because we start pulling back. And our 6:31:33first target is the previous high 6:31:35because this previous high is now 6:31:37resistance, right? We go up, we drop.6:31:41This now becomes resistance. So it acts 6:31:43as the first target. Okay. So let's talk 6:31:46about entry bars.6:31:48The ideal entry bars that you want to 6:31:50see at the end of a pullback look like 6:31:53this. They're either narrow range bars 6:31:56or they're small bottoming tails. We 6:31:58want to see small bars, right? Either 6:32:01small narrow range bars or small 6:32:03bottoming tails. And this is where, you 6:32:06know, really understanding uh the types 6:32:08of candlesticks that exist. This is 6:32:11where it becomes really important. So,6:32:13if you still don't know what a narrow 6:32:14range bar is or what a bottoming tail 6:32:16is, take a step back and go back to the 6:32:18reading candlesticks section of the 6:32:20course. So, after a pullback, we always 6:32:25want to see one of these entry bars 6:32:27because it enhances the buy setup. Okay?6:32:31[cough] Excuse me. So, let's understand 6:32:33why.6:32:34When looking at these two pullbacks,6:32:37which one of these pullbacks is much 6:32:40higher in quality in terms of reward 6:32:43versus risk? Which one is better in 6:32:45terms of reward versus risk? This one or 6:32:49this one? And if if you're looking at 6:32:51this one, well, obviously this is the 6:32:53correct answer. The reason this is a 6:32:55better pullback than this one is because 6:32:57first the bars are becoming continuously 6:33:00smaller. That's another thing we want to 6:33:03see. If the bars are becoming right,6:33:05these are red bars. If they're becoming 6:33:06continuously smaller, well, what does 6:33:08that mean? If the red bars are becoming 6:33:11smaller, that means the selling pressure 6:33:13is diminishing, right? Remember, we're 6:33:15trying to play long. We want the selling 6:33:18pressure to diminish.6:33:20The other thing is we also have an entry 6:33:22bar. You can see this is a kind of like 6:33:24a dogee bar, very, very small bar. Okay,6:33:28we could see that the selling is 6:33:29weakening and we have a clear entry bar.6:33:31In this case, the selling is not 6:33:34weakening. We have three large bars in a 6:33:36row and we don't have an entry bar,6:33:39right? There's no clean entry for us for 6:33:42us to actually go into the buy setup.6:33:46So, let's understand why we want entry 6:33:48bars. And this once again, guys, is 6:33:51going to touch up on the reward versus 6:33:52risk aspect of this setup. And like I 6:33:57said with the base breakout video, later 6:33:59in the course when you're looking at my 6:34:01risk management in my share sizing 6:34:03videos, make sure after you watch those,6:34:06you come back to this section of the buy 6:34:08setup 6:34:10and it'll give you a lot more 6:34:11perspective. It'll help you understand 6:34:13what I'm talking about here. But I think 6:34:16if you guys went through the base 6:34:17breakout, understanding everything, you 6:34:20guys should be good for this. So, entry 6:34:23bars improve your reward to risk. Why?6:34:27Well, with an entry bar, we have a 6:34:30tighter stop-loss. And just like the uh 6:34:33base breakout video, with a tighter 6:34:35stop-loss, we have a higher reward to 6:34:38risk ratio. This is why we want small 6:34:40entry bars, right? So, let's understand 6:34:42this. Remember, our entry is always over 6:34:46the entry bar. Our stop loss is always 6:34:49under the entry bar, right? We talked 6:34:50about this here. Once we get this bar by 6:34:53the 20-day moving average, our entry is 6:34:55over it. Our stop loss is under it.6:34:58So, in this pullback, we have an entry 6:35:01bar. In this pullback, we don't have an 6:35:03entry bar. So, what do we do? So, in 6:35:07this case, you know, in both of these 6:35:09setups, our stop loss is under the lows.6:35:12Under the lows is 590 is 590.6:35:17In this setup, we have the entry bar. So 6:35:19remember, our entry is above the entry 6:35:22bar's high. So it's at $6. Meaning after 6:35:26this bar has completed forming, we're 6:35:28going to be entering during this green 6:35:30bar. And as soon as it hits [snorts] the 6:35:34highs of this entry bar, that's when 6:35:36we're going to be entering and enjoying 6:35:37this move higher. In this case, we have 6:35:40a very, you know, the we have a we 6:35:42actually have an entry bar. So our entry 6:35:44is at $6. However, in this case, our 6:35:46entry has to be over this candle because 6:35:48we don't have an entry bar. So, in this 6:35:51case, we have a, you know, a larger 6:35:53entry. It's at 620 compared to $6.6:35:56Our targets in both of these scenarios 6:35:58is 650,6:36:00right? So, our stop loss is our stop 6:36:03losses are the same. Our targets are the 6:36:05same. However, because we have an entry 6:36:06bar here, we have a, you know, we 6:36:09actually have a clear entry price 6:36:10compared to this one. So in this case,6:36:13we are risking 10, right? Because that's 6:36:17the size of our stop, $6US 5.90. We're 6:36:20risking 10, meaning if you enter here 6:36:22and it drops to 5.90, you're out of the 6:36:25position. It hits your stop loss, it 6:36:27hits your risk, you're out of the 6:36:28position, right? Uh you're risking 10 6:36:31cents. In this case, if you enter at 620 6:36:35and it goes all the way to to your stop 6:36:38loss at 590, that's 30 cents.6:36:42So, right, because 620 minus 590 is 30 6:36:44cents. So, we're risking in this 6:36:47scenario 10 cents to make 50 cents 6:36:51because our target is at 650. Our entry 6:36:53is at six. We're risking 10 cents to 6:36:55make 50 cents.6:36:58In this scenario, we're risking 30 cents 6:37:01to make 30 cents. I don't know why this 6:37:05says 20. It should say 30. So, you could 6:37:08see that even though we have the same 6:37:10exact risk, because we actually have an 6:37:13entry bar here, we end up having a 6:37:15tighter stop-loss. Because we have a 6:37:17tighter stop-loss, we have a higher 6:37:19reward to risk because we're only 6:37:21risking 10 cents to make 50. While in 6:37:24this case, we don't have an entry bar.6:37:26We don't have a clear entry. We're 6:37:28risking 30 cents to make 30. Why would 6:37:32you risk $100, let's say, to make $100 6:37:35where in this case you're risking $100 6:37:38to make $500? Okay, hopefully that makes 6:37:41sense.6:37:43Now, let's look at some examples. So, we 6:37:47right here, we hit the 200 day moving 6:37:49average, which is acting as resistance 6:37:51for the stock. We drop to the look at 6:37:53this, the rising 20-day moving average 6:37:57that is under price. You could see that 6:38:01uh the 20-day moving average is halting 6:38:03prices from continuing lower. It's 6:38:06rising. It's rising. We get a rally and 6:38:09boom, we begin to retrace. And we have 6:38:13three red bars in a row. We have 1 2 3 6:38:15four red bars in a row. We It retraces 6:38:18into the rising 20-day moving average.6:38:20So, that's check. We al it's also 6:38:23retracing into the flat 200. So, that's 6:38:25a bonus. We have a 40 I believe what 6:38:28this is probably like a 50% retracement 6:38:30right if it rallied here pulled back to 6:38:32here that's probably 50% retracement I'd 6:38:34say right so that's a check it's uh 6:38:38there's consecutive lower highs there's 6:38:39consecutive red bars perfect and we have 6:38:42a bunch of entry bars here right we have 6:38:44a bottom uh uh bottoming tail then dogee 6:38:47bar then another bottoming tail and two 6:38:49other very small bars so we have a bunch 6:38:51of entry bars here whenever you get into 6:38:54this situation just put your stop loss 6:38:56under the absolute lows, right? So, this 6:38:58is the absolute lows of all these bars.6:39:01Put it at the lows. So, your stop loss 6:39:03would go here. Your entry would be over 6:39:05this bar. And boom, what a move higher.6:39:09Okay.6:39:10Uh let's look at another example. We 6:39:12have a rising 20-day moving average.6:39:15Check. We have a nice rally. Okay. We 6:39:18have three consecutive red bars in a 6:39:20row. Check. We have three consecutive 6:39:22lower highs in a row. Check.6:39:25Um, let's see. This is probably, yeah,6:39:2750% retracement, right, of this rally.6:39:30Check. Into the rising 20-day moving 6:39:33average. Good. Then we get a dogee 6:39:35bar/bottoming tail. Check. Very good 6:39:38entry bar. Stop or stop loss would be 6:39:40under this candlestick. Entry would be 6:39:43over this candlestick. And you would be 6:39:45entering during this green bar as soon 6:39:47as it hits the entry over that dogee 6:39:50candle. And boom, nice move higher.6:39:53Our target is right here. Let's look at 6:39:56another example of this buy setup. We 6:39:59have a rally. It's kind of a deep 6:40:01pullback, but given the overall context 6:40:04of the uptrend, it's not a big deal. We 6:40:06have a rising 20-day moving average.6:40:08Great. We have a really tight entry bar.6:40:11Really small entry bar. Perfect. And 6:40:13look at that move. Beautiful. Uh we also 6:40:16have I, you know, two red bars in a row.6:40:19You know, it's unfortunately it's two.6:40:21or maybe this might be a red bar as 6:40:23well, but you know, it's not going to be 6:40:24perfect every time. Sometimes there's 6:40:27going to be bits and pieces missing, but 6:40:29it's important to look at the overall 6:40:30context of what's happening. So,6:40:32beautiful buy setup here. Same same 6:40:35thing here. We rally, we retrace around,6:40:38I'd say like 45%. Rising 20-day moving 6:40:41average. Nice. You know, it's not a 6:40:44perfect candle, but it's a nice smaller 6:40:46candlestick we can base our entry off 6:40:48of. And boom, what a nice rally. entry 6:40:52would be over, stop loss under.6:40:55And check this out, guys. Uh, I believe 6:40:58this is the NASDAQ ETF, the QQQ. You 6:41:01could see that, you know, these are all 6:41:03buy setups. You could see we have a 6:41:05rising 20-day moving average.6:41:08Um, we have a flat 200 that's under 6:41:10price. Every time price touches the 6:41:13rising 20-day moving average, we go up.6:41:16So you guys are starting to see how we 6:41:19are combining 6:41:21different um elements that we are 6:41:24learning. We are combining our 6:41:26knowledge. We know that when the 20-day 6:41:28moving average is rising and trending 6:41:30higher, price tends to retrace back to 6:41:33it, right? Price goes up and retraces 6:41:36back to it. Price goes up, it retraces 6:41:37back to it. Goes up, retraces back to 6:41:39it. You guys get the idea. And we're 6:41:41combining our knowledge of how to use 6:41:43the 20-day moving average with the buy 6:41:46setup, with, you know, the 40 to 60%6:41:49retracement, with the lower uh 6:41:51consecutive uh red bars, with the 6:41:54consecutive lower highs, uh with the 6:41:57entry bars, right? We're combining all 6:41:59of this information to produce a very 6:42:01potent setup. Okay, we looked at this 6:42:05example earlier. Take a look at this. We 6:42:07rally. We have a rising 20-day moving 6:42:09average right here. Nice dogey bar. We 6:42:12rally. We actually end up kind of basing 6:42:14and then retracing back. Another buy 6:42:16setup. Boom, boom, bam. And what we have 6:42:19to understand, guys, not every buy setup 6:42:22is going to be perfect. You're not 6:42:23always going to get exactly what we 6:42:26talked about in this class. However,6:42:28just look at the overall context of 6:42:30what's going on. This is not a perfect 6:42:33setup. We had a bit more retracement 6:42:35than we wanted to. However, given that 6:42:38it's also retracing to the prior 6:42:39support, it's in a really strong 6:42:42uptrend. We have a really nice rising 6:42:4420. It looks like a nice setup. Okay, so 6:42:48not every buy setup is going to be 6:42:49perfect. You have to look at the overall 6:42:51situation, the overall context. You have 6:42:53to look at multiple time frames. Okay,6:42:56and yeah, make sure you take advantage 6:42:59of the setup, guys, and make sure you 6:43:02really understand everything we talked 6:43:04about today, okay? You can't have 6:43:07missing parts, right? And I'm trying to 6:43:10think of anything else I want to 6:43:11emphasize here. Something I really want 6:43:14to emphasize actually is play with the 6:43:15trend. Okay? If we're in an uptrend and 6:43:19several time frames are telling you that 6:43:22this is bullish, we're in an uptrend. On 6:43:25several time frames, we have rising 6:43:2620-day moving averages that are trending 6:43:28under price, right? Let's say that's 6:43:30happening on several time frames. all 6:43:32the time frames are telling you that 6:43:33it's bullish that there's that there's 6:43:35uh buying pressure, right? Then look for 6:43:39buy setups. Don't look for buy setups if 6:43:42we are in a downtrend. If there's a lot 6:43:45of selling pressure, if we have conflict 6:43:47on the time frames, where one conflict 6:43:49says bullish, one conflict uh one uh 6:43:52where one time frame says bullish, one 6:43:54time frame says bearish, right? Uh one 6:43:56time frame is sideways. Don't play a buy 6:43:59setup in those conditions. play a buy 6:44:01setup when everything looks bullish,6:44:02when we have a clear uptrend. Okay, hope 6:44:05that makes sense, guys. Thanks for the 6:44:06class. And we're going to be talking 6:44:09about the sell setup in the next class,6:44:11which is the exact opposite of the buy 6:44:14setup. Buying the dip is by far one of 6:44:16the most popular strategies in trading.6:44:18Yet, over 90% of traders have no idea 6:44:22what to look for when it comes to buying 6:44:25the dip. And frankly, most of those 6:44:27traders lose money trading this simple 6:44:30strategy. And in this video, I want to 6:44:32teach you the exact criteria that you 6:44:34want to look for when it comes to buying 6:44:37the dip. And I'm going to teach you how 6:44:38to differentiate between a highquality 6:44:41dip opportunity and a lowquality dip 6:44:44opportunity that's just going to 6:44:45continue to trend against you. And this 6:44:48could be applied for day trading. It 6:44:50could be applied for swing trading, for 6:44:52core trading. This could even be applied 6:44:55for long-term investing where if you 6:44:57like to dollar cost average into your 6:44:59retirement account or into your 6:45:01long-term portfolio, you could still 6:45:03apply this strategy, especially when 6:45:05you're DCAing into the market or your 6:45:08favorite indexes. This could also be 6:45:10applied for stocks, for crypto, for 6:45:12futures, for options, for forex. So,6:45:15make sure you pay attention. Make sure 6:45:17you watch until the end of this video 6:45:18because this is something that I've been 6:45:20trading for over 5 years. This is one of 6:45:22my core strategies and I buy the dip. I 6:45:26trade the retracement setup almost every 6:45:28single day. And the first thing that you 6:45:31need to understand before I dive into 6:45:34the strategy is the idea and the theory 6:45:37behind price correction. And the best 6:45:40way that I could explain this is imagine 6:45:42that you just ran a marathon. You just 6:45:45ran 26 miles in the New York Marathon 6:45:48and you are tired. you just finished the 6:45:52marathon, right? Are you going to be 6:45:54able to run another marathon? Are you 6:45:57going to be able to, you know, finish 6:45:59that marathon, run the 26 miles, and 6:46:02then immediately run another marathon?6:46:04Well, unless you're David Gogggins,6:46:07unless you're superhuman, obviously not.6:46:10You're going to need to hydrate. You're 6:46:12going to need to sleep. You're going to 6:46:14need to rest. You got to drink some 6:46:16water. You got to go home. You got to,6:46:18you know, visit the doctor. Maybe you 6:46:20have some injuries, right? You can't 6:46:21just run two consecutive marathons. You 6:46:24need a resting period. Well, the markets 6:46:28work in a very similar way where let's 6:46:31say the market puts in a massive rally.6:46:34The market just ran a marathon to the 6:46:37upside, right? The market can't just 6:46:40continue higher and higher and higher to 6:46:42infinity. No, the markets and stocks,6:46:46they need a resting period. They need to 6:46:49correct in price. And there's two ways 6:46:53in which prices can correct. There's two 6:46:55ways two ways in which prices can rest.6:46:59The first way is through a consolidation 6:47:02where the markets run a marathon. Prices 6:47:06are moving up. Everything is mooning.6:47:08And then the markets rest and they 6:47:10consolidate. They base and they rest 6:47:13until that stock or the market is ready 6:47:16to run the next marathon. And this is a 6:47:21way in which prices can correct through 6:47:23literally resting and just 6:47:25consolidating. And this strategy is 6:47:27called the breakout. And this is one of 6:47:30my core strategies as well. I actually 6:47:32teach this strategy on this YouTube 6:47:34channel in a different video. So I would 6:47:36highly recommend watching that video as 6:47:38well. But the other way in which prices 6:47:41can rest or correct is through price 6:47:45action in the form of a retracement 6:47:48where the markets run a marathon, they 6:47:51move up, buyers are buying, buyers are 6:47:53stepping up to the plate and then once 6:47:55the market or the stock runs a marathon,6:47:58it needs to cool off. It needs to have a 6:48:01resting period, a correction period. And 6:48:04one of the ways that could happen is 6:48:06through literally a retracement, through 6:48:08a dip. And this happens because buyers 6:48:11are probably or buyers from down here 6:48:14are taking profits. Maybe there's even 6:48:16some short sellers that think prices 6:48:18have topped and they're shorting which 6:48:20is causing downward pressure. But I 6:48:23would say it's mostly buyers taking 6:48:25profits. So the markets can rest, the 6:48:28markets can breathe before they're ready 6:48:31to move up again and run the next 6:48:34marathon, so to speak. So a retracement 6:48:36is a temporary pullback before the trend 6:48:40resumes. And you can think of this as 6:48:42the market breathing. The market is 6:48:45resting before the next leg higher.6:48:48Because if the markets are just going up 6:48:51and up and up and up and up, that trend 6:48:55is unsustainable. Nothing can just go up 6:48:58forever. In the same way, nothing can go 6:49:00down forever. There needs to be a period 6:49:03of price correction. And if you really 6:49:06think about it, this strategy is really 6:49:10you just trading the continuation 6:49:13of an established trend. Remember, the 6:49:16trend is your friend. I see so many 6:49:19traders who gravitate towards taking 6:49:21reversals, especially beginners. Why?6:49:24And to really paint the picture here,6:49:28imagine you're driving your car on the 6:49:30highway. Do you want to be driving in 6:49:32the direction of traffic or do you want 6:49:35to be driving against traffic? Well, I 6:49:37don't know about you, but I don't want 6:49:38to crash headon into another car. I want 6:49:41to trade in the direction of traffic.6:49:44Yet most traders want to, you know,6:49:47drive against traffic, right? In the 6:49:50same way they want to trade against the 6:49:53trend. It is far easier trading with the 6:49:56trend, especially if you're a beginner.6:49:57I'm not saying don't take reversals. I'm 6:50:00not saying you shouldn't have a reversal 6:50:01strategy in your plan. I do. I actually 6:50:04like taking reversals. I don't usually 6:50:06gravitate towards them, but you know, I 6:50:08do have a reversal strategy within my 6:50:10trading plan. However, I always prefer 6:50:12to trade with the trend because it's 6:50:14much easier. So, if the trend is your 6:50:17friend, what is the first step when it 6:50:19comes to trading the retracement setup?6:50:22Well, the first step is you need an 6:50:24uptrend or clear bullish momentum. You 6:50:29need to be confident that prices are 6:50:32going higher. I want to be trading in 6:50:34the direction of the trend. If there is 6:50:37a downtrend, I don't want to be going 6:50:39long. If there's a sideways trend, I 6:50:42also most of the time don't want to be 6:50:44going long. I only want to go long when 6:50:47I'm confident what the trend is. So,6:50:50what is an uptrend? And most of you are 6:50:52already going to know this. It's very 6:50:54simple. And by the way, if you can't 6:50:56tell, I like to keep my trading as 6:50:59simple as possible. That's what makes me 6:51:01a profitable trader. I don't like to use 6:51:03complicated indicators. I don't like to 6:51:05use complex strategies. I trade 6:51:08essentially two to three core 6:51:10strategies. Number one, the retracement 6:51:13setup. Number two, the breakout or the 6:51:16breakdown. And I also like to trade 6:51:18reversals at times. However, I would say 6:51:2190% of the time I am trading in the 6:51:24direction of the trend through either a 6:51:26retracement aka buying the dip or 6:51:29through a breakout. So, what is an 6:51:32uptrend? An uptrend, it's very simple.6:51:35higher highs, higher lows. Okay, that's 6:51:38all you need to know. All right, we have 6:51:40higher highs right here, right here,6:51:42right here, and we have higher lows 6:51:44right here. We know that the overall 6:51:46direction is moving higher. Now, your 6:51:48goal as a trader is to essentially time 6:51:51your entries when this dip happens. This 6:51:55is when you obviously want to be getting 6:51:57into the trend. You don't you don't want 6:51:59to be getting into the trend here. Most 6:52:01people actually FOMO here because they 6:52:03think they're missing out just to see 6:52:05that stock move down, they sell here, it 6:52:09starts to move up again, then they buy 6:52:11either here or here just to see it move 6:52:13down, they sell, and then the cycle 6:52:15repeats. And that's how most retail 6:52:18traders unfortunately trade. They buy 6:52:20the top and then they sell the low of 6:52:22the retracement when it should be the 6:52:24opposite. they should be buying the 6:52:26retracement and then of course selling 6:52:28this point right here. Or maybe you're 6:52:31going uh for a much larger move. Maybe 6:52:34you're swing trading or maybe you're 6:52:35holding your trade intraday when you're 6:52:37day trading for like a few hours and 6:52:39you're aiming for a much bigger gain.6:52:41You could actually buy down here and 6:52:43then hold through all of these dips in 6:52:45attempt to catch a much bigger move. But 6:52:48you need an uptrend. If you don't have 6:52:50an uptrend, you need clear bullish 6:52:53momentum. And one of the ways um that I 6:52:57like to see clear bullish momentum is 6:53:01through a bullish gap up. So what is a 6:53:05gap? A gap is an overnight change in 6:53:08price. This is when a stock opens the 6:53:11next day at a different price in which 6:53:14it closed the previous day. So let's say 6:53:16Tuesday 400 p.m. Eastern when the market 6:53:19closes, the stock closes at $5. And then 6:53:22the next morning, Wednesday, at 9:30 6:53:25a.m. Eastern, when the market reopens,6:53:27that stock opens at $10. That difference 6:53:31in price that occurred overnight is 6:53:34called a gap. And I like to trade the 6:53:37continuation 6:53:39of a bullish gap up. And a bullish gap 6:53:42up gives me bullish momentum. It gives 6:53:45me a bullish bias. So, lots of my 6:53:48retracement setups actually occur on 6:53:51bullish gap ups. And I'm going to show 6:53:54you a bunch of examples of that. But 6:53:55here's an example of a gap up. This was 6:53:58on plug. Oh, no. I'm sorry. This was on 6:54:00open, I believe, just a few weeks ago.6:54:04And this stock closed right here the 6:54:06previous day. And then the next day it 6:54:08opened 29% higher right here. You could 6:54:11literally see the gap in price. You 6:54:14could see this overnight change in 6:54:16price. And of course, the stock 6:54:18absolutely mooned that day. And there 6:54:20was a beautiful retracement setup on 6:54:23this day, which I'm going to show you a 6:54:24little bit later in this video. But this 6:54:26was a gap up that gave this stock clear 6:54:29bullish momentum. We were gapping above 6:54:31resistance. We were also gapping above 6:54:33two red bars, which trapped all of the 6:54:36sellers who went short here or here or 6:54:39here. So, really amazing gap up. I have 6:54:42other videos that go a lot more in depth 6:54:44when it comes to explaining gaps, but 6:54:46this was a really nice gap up that 6:54:48obviously continued higher. Here's 6:54:50another example. This was on rum just a 6:54:52couple of days ago. I will also show you 6:54:54this example later in the video, but it 6:54:56gapped from here the previous day and it 6:54:58opened right here, which was an around 6:55:0011% gap up. All right? And this actually 6:55:05also had a retracement setup. I had a 6:55:06buy the dip opportunity on this day, but 6:55:08this gap up gave this stock a bullish 6:55:12bias and my my bias on this day was to 6:55:16go long. So, I was looking for either a 6:55:18breakout or a retracement setup to 6:55:21essentially trade this bias on the 6:55:24intraday time frames. If that still 6:55:27sounds a little confusing, we're going 6:55:28to be looking at a ton of different 6:55:30examples later on in this video. But 6:55:32essentially my point is I need either an 6:55:34established uptrend or I need a bullish 6:55:38bias. I need bullish momentum. And one 6:55:40of the ways I could see you know bullish 6:55:43momentum is through a bullish gap up a 6:55:46bullish overnight change in price to the 6:55:48upside. So when it comes to identifying 6:55:51a high quality dip buying opportunity,6:55:55we look for specific pullback criteria.6:55:59And let's go ahead and go over every 6:56:01single one of these pullback criteria.6:56:03And from there, we're going to go to 6:56:05real charts and apply everything that I 6:56:08have just taught you. Okay? So, I'm 6:56:10going to go through this section a 6:56:12little bit quicker. We're not going to 6:56:14be looking at examples right away. I 6:56:15want to show you all of the material 6:56:17first, and that's when we're going to go 6:56:19and look at examples and apply 6:56:21everything that you've just learned. So,6:56:23first step, following a rally higher.6:56:26So, the market ran a marathon up. We 6:56:29want three or more consecutive red bars 6:56:33in a row on the pullback. So, we got 6:56:35one, two, three, four. We want three or 6:56:40more red bars in a row. Now, this is 6:56:44like the ideal scenario. You're not 6:56:46always going to get perfectly three to 6:56:48five consecutive red bars in a row, but 6:56:51this is what you want to look for. You 6:56:52want to see three or more consecutive 6:56:54red bars in a row. Why is that 6:56:56important? It's important to know that 6:56:58because you don't want to see Christmas 6:57:01lights. What are Christmas lights? Red,6:57:04green, red, green, red, green, red,6:57:07green, and then you move up. You don't 6:57:08want to see this. And the reason you 6:57:10don't want to see this is because as 6:57:13prices start to move up, if you have 6:57:17green bars within this pullback, well, a 6:57:20lot of those buyers, like think about 6:57:22it. If you bought it right here and then 6:57:24prices continued lower and now you're 6:57:27down on your position and then all of a 6:57:29sudden prices start moving back up, you 6:57:31might feel the need to actually just cut 6:57:34that trade because you felt wrong and 6:57:36you were losing money, right? or if you 6:57:39especially if you bought it up here and 6:57:40then prices continued lower. If prices 6:57:42move back up, well, at that point, you 6:57:44might just cut your losses or you might 6:57:46just say, "Hey, this was a failed trade.6:57:47I'm going to get out break even and 6:57:50you're going to have almost like layered 6:57:52buyers within this pullback." And you 6:57:55don't want that. You want there to be 6:57:57clear selling, okay? You just want the 6:58:00sellers to be taking profits before the 6:58:03next move up. You don't want selling and 6:58:05then a little bit of buying and then 6:58:06selling and then buying and then selling 6:58:07and then buying. You don't want 6:58:09Christmas lights because these layered 6:58:10buyers could actually put sell pressure 6:58:14on this stock as it's moving up where as 6:58:17it's moving up these buyers sell then 6:58:18these buyers sell and then all of a 6:58:20sudden you have a really choppy kind of 6:58:22next move higher. You don't want that.6:58:25You want three or more consecutive red 6:58:28bars in a row. You don't want Christmas 6:58:30lights.6:58:33Criteria number three, you want to look 6:58:36for prices to retrace into the 20 period 6:58:40simple moving average. I like to keep my 6:58:44trading as simple as possible. I don't 6:58:46use complicated indicators. I don't use 6:58:48MACD or Ballinger bands or RSI or VWAP 6:58:52or stochastics or Elliot wave theory or 6:58:55Fibonacci. I don't use any of that. I 6:58:58keep my trading very simple. I only use 6:59:01two simple moving averages and volume.6:59:05That is it. And the 20 period simple 6:59:08moving average is the ultimate trend 6:59:11following tool in existence. Now pay 6:59:15attention to what I just said. Trend 6:59:17following tool. That is our first step 6:59:20for trading the retracement is we want 6:59:23to have an uptrend. We want to have an 6:59:26established trend higher. And that's 6:59:28exactly why I like to use the 20 MA.6:59:31Now, what we want to look for is we want 6:59:34the 20 MA to be under price, trending 6:59:37higher. I want you to say that out loud.6:59:40You're watching this YouTube video. I 6:59:41want you to literally say it with me.6:59:43Under price, trending higher. Under 6:59:45price, trending higher. Under price,6:59:48trending higher. We want the 20 MA to be 6:59:51under price, trending higher. And we 6:59:54want to be timing our entries when 6:59:58prices are close to or near the 20 MA.7:00:03That's what we're looking for. When 7:00:04prices are, let's say, really far from 7:00:08the 20 MA, that means there's extension.7:00:12Extension is the distance between price 7:00:15and the 20 MA. We don't want to be 7:00:17entering when there's a lot of 7:00:19extension. So you could use the 20 to 7:00:23figure out whether prices have corrected 7:00:26enough, whether prices are extended or 7:00:29you could think of it as overbought. So 7:00:31the closer we are to the 20 MA, the less 7:00:34extended we are, the less overbought we 7:00:38are. And that's why we want to be timing 7:00:40our entries when prices are near the 20 7:00:42MA. And let me show you an example. It's 7:00:44going to be a lot easier when you 7:00:46actually just visualize this. Take a 7:00:48look at this uptrend. Take a look at 7:00:50every single retracement setup here.7:00:53This is the 20 MA, the blue line. What 7:00:54is it doing? It's under price, trending 7:00:57higher. It's not flat. When the 20 MA is 7:00:59flat, it's not effective. That suggests 7:01:02that prices are trendless, that their 7:01:04prices are sideways. We wanted to be 7:01:06under price trending higher. And notice 7:01:09every time we got close or we touched 7:01:13the 20 MA, we bounced. And that was 7:01:18honestly a very good dip buying 7:01:20opportunity. Literally every time it hit 7:01:22the 20 MA, every single retracement 7:01:25here, here, here, here, here, here,7:01:29here, here. You get the idea. Every 7:01:31single retracement got bought. And this 7:01:34is exactly why I like to use the 20 MA 7:01:37in conjunction with everything else that 7:01:39I'm going to teach you in this video.7:01:41Whenever I teach the 20 MA, people are 7:01:43like, "Oh, well, you're just using an 7:01:45indicator for your entries." No, I use 7:01:47it as a complement. It complements every 7:01:52other part of my analysis. It 7:01:54complements the other criteria. I use it 7:01:56to my advantage. I don't solely rely off 7:01:59of it. Here's another example of a 7:02:01downtrend. We base into the 20 MA, drop,7:02:04base into the 20 MA right here, drop.7:02:07Retrace a little bit, we come a little 7:02:08close, drop. Okay, that's why I like to 7:02:11use the 20 MA. Here's another example.7:02:14And we weren't quite, you know, right at 7:02:17the 20, but we're pretty near the 20.7:02:20And this was actually on the 15minute 7:02:22time frame. On the five minute time 7:02:23frame on this chart, we were actually 7:02:25right by the 20. But this was an 7:02:26excellent buy the dip opportunity where 7:02:28we moved up, retraced, and that was an 7:02:31excellent buying, you know, buy the dip 7:02:33setup. So, we want the 20 MA to be under 7:02:36price, trending higher, and we want to 7:02:38see prices retrace into the 20 MA or at 7:02:41least come close to the 20 MA. This is a 7:02:44very important requirement.7:02:47Criteria number four is actually pretty 7:02:50simple. We want to see the stock retrace 7:02:5440 to 60% of the prior move. We want it 7:02:58to pull back 40 to 60% of the original 7:03:02rally. retracement. If you want to 7:03:04define what a retracement is, it's just 7:03:06the amount that the stock pulls back.7:03:08So, we want to see this pull back into 7:03:10what I call the golden zone. And that is 7:03:13between 40 to 60% of this rally. Right?7:03:17So, let's say this was 0% the bottom of 7:03:20the rally. This was the top of the rally 7:03:22that represents 100%. We want it to pull 7:03:25back around 40 to 60% of this rally,7:03:28which is like this area right here. We 7:03:30don't want it to pull back deeper than 7:03:3360%. We don't want it in this area right 7:03:36here because a deep pullback suggests 7:03:40weakness. If that stock was really that 7:03:43strong, if that trend was really that 7:03:46established and really that strong to 7:03:49the upside, why would it retrace over 7:03:5260%. And the same thing applies almost 7:03:54in the opposite way if it's under 40%.7:03:57So let's say a stock pulls back here 7:04:00right into this area that shows lack of 7:04:03correction. And you know just through my 7:04:06experience when you have a very shallow 7:04:08retracement where it's not into this 7:04:11golden zone where it's like 20%7:04:13retracement or 30% retracement whenever 7:04:15it attempts to move higher it fails 7:04:18because it just hasn't corrected enough.7:04:20It hasn't gone through enough of a 7:04:22resting period for prices to continue 7:04:25higher. And similarly, if you see a 7:04:27really deep pullback into this area,7:04:30well, prices are really weak. And what 7:04:31tends to happen is it starts to move up,7:04:34you get excited, and then it fails. And 7:04:36that's just through my personal 7:04:37experience. You want to see it into the 7:04:39golden zone, the 40 to 60%7:04:42um retracement of this prior move.7:04:45That's really the sweet spot. Criteria 7:04:47number five, before I enter into any 7:04:50single trade in the markets, I need a 7:04:52predetermined entry, predetermined 7:04:55stop-loss, and of course, predetermined 7:04:57target because that's going to add 7:04:59structure to my trading. I hate 7:05:02operating randomly. I want to know where 7:05:05I'm supposed to get in and where I'm 7:05:07supposed to get out if the trade doesn't 7:05:09go in my favor. A lot of traders operate 7:05:14completely randomly and then they expect 7:05:17consistent results. That makes no sense.7:05:19If you want consistent results, you need 7:05:22consistent input. That means you need a 7:05:24structured approach towards entering and 7:05:27exiting a trade. So the entry and the 7:05:31stop-loss for the retracement setup is 7:05:33actually really simple. So your entry is 7:05:36going to go over the last candlestick of 7:05:40the pullback. I'm going to show you what 7:05:41that looks like in a second. Your stop 7:05:43loss is going to go under the lows of 7:05:46the retracement. So, you find the lowest 7:05:48point of the retracement. Your stop loss 7:05:50is going to go below it. And the target 7:05:52is the previous high. So, where are the 7:05:56last candlesticks of the pullback? Well,7:05:58right here, these two. So, entry over 7:06:01these two candlesticks, stop-loss below 7:06:04the lows of the retracement, and you're 7:06:06going to be targeting the previous high.7:06:08That is target number one. Now, that's 7:06:11super simple. And ideally, you want your 7:06:14entry bars, right? Right here. These are 7:06:17our entry bars because we're using these 7:06:19bars to base our entry and stop loss off 7:06:22of. We want the these to be narrow range 7:06:24bars or dogee bars. We want these to be 7:06:27relatively small candlesticks. And the 7:06:29reason we want that is because it's 7:06:32going to give us a far better reward to 7:06:35risk. So, how do you size your position?7:06:38If you watched my risk management video,7:06:40you should already know this. Or if if 7:06:42you've watched my free 10 plus hour 7:06:43course, you should know this. The share 7:06:45sizing formula is risk divided by entry 7:06:49minus stop-loss. And then entry and stop 7:06:51loss. They're in parenthesis. So, you 7:06:53calculate this first before you do the 7:06:55division. So, let's say our entry is at 7:06:57$4, stop loss is at 390, and our risk is 7:07:01$100. $100 divided by $4 minus 390. So 7:07:05that's $100 divided by 10. $100 divided 7:07:09by 10 cents is a,000 shares. So that 7:07:12would be our share size for this 7:07:14position. If we get a,000 shares at $4 7:07:17and it hits our stop loss at 390, we 7:07:19would lose $100. All right. Now, why do 7:07:23we want small candlesticks? Well, let me 7:07:26give you this example. Let's say this is 7:07:27a really large candlestick like that.7:07:30Let's say these candlesticks are larger 7:07:32and then all of a sudden we have a much 7:07:34bigger stop where instead of our stop 7:07:36being at 390, let's say our stop is at 7:07:39370 7:07:41all of a sudden. Then we have to go and 7:07:43actually change the formula around 7:07:45because our entry remains the same,7:07:47right? But our stop loss is different.7:07:49So instead of 390, this would be 370. So 7:07:53now our share sizing formula would be 7:07:56$100 divided by 30 because $4 minus 370 7:08:01that's the distance between our entry 7:08:03and our stop. 30 cents, right? So $100 7:08:07divided by 30 that means we would only 7:08:10be able to get 333 7:08:13shares for this position because we have 7:08:15a much bigger stop-loss and therefore we 7:08:18have a much lower RTOR. So we want 7:08:22smaller candlesticks. We want smaller 7:08:25entry bars so we can get a tighter stop.7:08:28And as a result, we could have a better 7:08:31reward to risk for, you know, our same 7:08:34risk. Keep in mind with having a 30 cent 7:08:37stop now versus a 10 cent stop before,7:08:40our risk hasn't changed. What's changed 7:08:43is the amount of shares that we can get.7:08:47so that you know if the trade does hit 7:08:49our stop loss, right, we're only going 7:08:51to lose $100. So, we want smaller entry 7:08:54bars because we have a better RTOR.7:08:57Criteria number six, we want to look for 7:09:00a retracement into what's called minor 7:09:03support. This is when prior resistance 7:09:06of that uptrend becomes support for the 7:09:10next dip. So for example, let's say we 7:09:13are right here and prices move up.7:09:17Fantastic. We want to see this next dip 7:09:21basically dip into the prior resistance,7:09:24right? Like at this point right here,7:09:26this prior high, it's going to act as 7:09:29resistance. That's why this prior high 7:09:31is target one because that's the next 7:09:34level of resistance. But on this dip, we 7:09:37want to see this prior resistance, this 7:09:40area of resistance become support. And 7:09:44this is a really nice amplifier where if 7:09:46we could have a nice move up and then a 7:09:49dip into what was before resistance,7:09:53that's exactly what we want to see. This 7:09:55is a really solid area to potentially 7:09:58buy the dip for the next move higher.7:10:00So, if I draw it out, we have an 7:10:02uptrend, right? We have an uptrend. This 7:10:05is an area of resistance. We want this 7:10:09area of resistance to now become support 7:10:13and it moves up. Same thing here. This 7:10:16area of resistance, okay, right here,7:10:20now becomes support for the next dip 7:10:22before we move up. And this is a really 7:10:26nice amplifier. And it's really simple.7:10:28prior resistance, the prior high 7:10:30basically becomes support for this stock 7:10:33within the uptrend. Now, before I show 7:10:36you some real life examples and some 7:10:37recent trades that I have taken where I 7:10:40was trading the retracement setup, I 7:10:42want to emphasize that you don't need 7:10:44every single one of these criteria to 7:10:47hit in order to buy the dip. And that 7:10:50somehow rhymed, but you don't need every 7:10:53single one of these qualities, right?7:10:55You can pick and choose which qualities 7:10:58you want to put into your trading plan.7:11:00For example, let's say I'm looking at a 7:11:02retracement setup and it's into the 7:11:05golden zone. Great. It's into a rising 7:11:0720. Great. It has three or four red bars 7:11:10in a row. Fantastic. It has a nice 7:11:13entry. It has a really good reward to 7:11:15risk, but it's not retracing into minor 7:11:18support. I will still probably take that 7:11:20trade because it hit enough of my 7:11:23criteria. Let's say instead maybe it did 7:11:26retrace into minor support, but it's not 7:11:30quite into the golden zone. Maybe it's 7:11:32like right here, like 65% retracement,7:11:36but it's into the rising 20. It has a 7:11:39really bullish catalyst. It has three or 7:11:41more red bars in a row. It has a really 7:11:43nice RTOR. I might still take that 7:11:46trade, right? So, you can pick and 7:11:48choose which criteria you want to 7:11:51specifically focus on on your setups 7:11:55because you're not always going to get 7:11:56picture perfect retracement setups. If 7:11:59you do, great. You should just take it,7:12:01but you're not always going to get 7:12:03picture perfect. So, you can decide 7:12:05which one of these qualities you want to 7:12:08include in your game plan. and you can 7:12:11decide which one of these qualities are 7:12:13like necessities versus maybe some of 7:12:16these are more optional for you. So,7:12:17right off the bat, I want to show you 7:12:19what a power trend is first and how you 7:12:22can capitalize trading retracements 7:12:25within a power trend. And a power trend 7:12:28is exactly what it sounds like. It's a 7:12:31powerful trend. And most of the time,7:12:33you're going to see the 20 SMA under 7:12:36prices trending higher. And you will see 7:12:39it kind of trending in a 45° angle. When 7:12:43you see the 20 MA trending in a 45°7:12:45angle, it suggests that the trend is 7:12:48sustainable. When you see it trending at 7:12:50a little bit, you know, greater than a 7:12:5345 degree angle, that's when the trend 7:12:55is kind of getting exhausted. And you 7:12:57could see this was on Wayfair just 7:12:58recently over the last few weeks. I 7:13:01mean, look at this beautiful uptrend.7:13:03Every time it retraced to the 20 period 7:13:06moving average, literally every single 7:13:08time it respected the 20 MA and then 7:13:11started to rally right after that. Even 7:13:13here, we broke below the 20, instantly 7:13:15rejected and continued higher. Even 7:13:17here, almost broke below the 20,7:13:19instantly rejected and continued higher.7:13:22Here's another really good example of 7:13:24that going both ways. Here we have a 7:13:27solid power trend to the downside where 7:13:29we dropped retraced to the 20 MA dropped 7:13:33retrace to the 20 MA. And this is also,7:13:36you know, a retracement setup just to 7:13:38the downside. So everything that I 7:13:39taught you in this video could also be 7:13:41applied if you're going short. You would 7:13:43just apply it the opposite way where the 7:13:4620 MA is over price trending lower. And 7:13:50all of the same criteria would apply the 7:13:52same exact way. So, retraced to the 20 7:13:54MA, dropped, retraced to the 20 MA. This 7:13:57time it gapped down all the way to the 7:14:00200, respected it, right? Retraced back 7:14:03to the 20, dropped, retrace back to the 7:14:0520, dropped. And then the same thing 7:14:07happened on this uptrend. You could see 7:14:09how well prices are respecting the 20 MA 7:14:12on this power uptrend. And every time we 7:14:15got a retracement to the 20 MA, we ended 7:14:18up rallying. We could even look at the 7:14:20S&P 500, which has basically been on a 7:14:24power uptrend since the tariffs happened 7:14:28in early April. And we've rallied 36%7:14:32since then. And take a look on this 7:14:34uptrend. Every single dip into this 7:14:37rising 20 MA got bought. We dipped right 7:14:41here, right to the 20, instantly moved 7:14:43up. Dipped into the 20, moved up, dipped 7:14:46into the 20, moved up. Even here we 7:14:48broke below the 20, instantly rejected,7:14:51continued higher, dipped right into the 7:14:5320, perfectly respected it. Same thing 7:14:55here, same thing on this tail. Same 7:14:57thing recently here. So, if you're 7:15:00noticing that you're looking at a stock 7:15:02or any type of asset that is power 7:15:04trending and closely following the 20 7:15:07SMA, you could actually use every dip 7:15:11into the 20 SMA as a buying opportunity,7:15:14especially if it matches up with the 7:15:17other criteria that I have taught you.7:15:19Let's look at some individual 7:15:20retracement setups that we can 7:15:22understand and analyze. So, the first 7:15:24one is plug. We already looked at this 7:15:27gap earlier in the video, but this gap 7:15:29from 284 the previous day and it opened 7:15:32around 13% higher at 321 the next day.7:15:36It was gapping above a red bar and it 7:15:39was also gapping above resistance. So 7:15:41this was a really bullish gap and this 7:15:44gave me a bullish bias for the day on 7:15:47plug. From there we go to the smaller 7:15:49time frame. So, I like to use the 7:15:515-minute chart, especially around 30 7:15:54minutes into the day. And funny enough,7:15:57I will be honest, I actually got stopped 7:15:59out on plug because I originally tried 7:16:01it as a breakout here. I was super 7:16:05aggressive. It was extended from the 20 7:16:08MA. So, really aggressive setup and I 7:16:10took a full stop on this. And funny 7:16:12enough, right after that, I called this 7:16:14as a retracement setup. And I had a lot 7:16:16of my students actually take this play 7:16:18and make money. But I ended up passing 7:16:19on it. And then looking back at it, it 7:16:21was just a, you know, beautiful 7:16:24retracement buy the dip opportunity. But 7:16:26I already kind of took a stop on this,7:16:28so I stopped watching the plug and I 7:16:30started focusing on other stocks. But 7:16:32wow, what a setup here. Really nice 7:16:34pullback. We had three or more red bars 7:16:37in a row. We did have one dogee, but 7:16:39it's never going to be exactly exactly 7:16:41perfect. So, nice pullback into the 7:16:44rising 20 MA. I would call this a 40 to 7:16:4760% retracement, right? Maybe 60%, 55%,7:16:53something like that. But we're into that 7:16:54golden zone. Perfect. We had a gap up,7:16:58so we can't really look at minor 7:17:00support. So, you know, that criteria 7:17:02doesn't really apply. And the entry 7:17:04would go over these candlesticks over 7:17:07345 stop loss around 335. So it was a 7:17:1010-centent stop and this ended up moving 7:17:12all the way to 392 which is around a 40 7:17:15to 50 cent gain. So this was like a four 7:17:18to five bar trade. It would have been 7:17:20and maybe you took profits at target one 7:17:22and then you left a runner and you know 7:17:24maybe you took those profits somewhere 7:17:26up here. a really nice retracement 7:17:29setup. And obviously, I didn't take 7:17:31advantage of this, but I had a ton of 7:17:32students who did. And yeah, this is a 7:17:35really great example of a bullish gap on 7:17:37the daily time frame. And then you trade 7:17:39that bias via a retracement setup on the 7:17:43intraday time frames. Let's look at 7:17:44another example, and this was on Rumble 7:17:47Rum. And this was also just a few days 7:17:49ago. This was just this past Friday.7:17:51This was the same day that the plug 7:17:53happened. And I know that because I 7:17:55actually called this trade in my group.7:17:58And this stock gapped from 739 to 823,7:18:02which was an 11% gap up. So that gave me 7:18:05a bullish bias for the day because we 7:18:07were gapping above this resistance. And 7:18:10the next major resistance was honestly 7:18:12the 200 period simple moving average. So 7:18:15I thought that this stock could actually 7:18:16run up to around $9 for that day. and I 7:18:21go to the 5minute time frame and we'll 7:18:24look at the other time frames in just a 7:18:25second here. But we get a beautiful 7:18:28retracement setup. We got a nice move 7:18:30up. Four red bars in a row. Perfect. We 7:18:32don't see any Christmas lights. We are 7:18:34kind of far away from the 20. But you 7:18:36got to keep in mind because of the big 7:18:38gap up. It's going to take time for the 7:18:4020 MA to catch up to prices, but it's 7:18:43still rising. It's still under price.7:18:46And the entry would be over this red 7:18:48bar. stop loss directly below and we 7:18:52would enter this trade basically as this 7:18:55green bar is forming. We don't wait for 7:18:57this green bar to finish forming and 7:18:59then take it. As soon as it hits above 7:19:02this entry above what was it 833, we 7:19:06would get into the trade. So you don't 7:19:08need to wait for this green bar to 7:19:10actually finish forming. And this was 7:19:12kind of a deep retracement. you know,7:19:14maybe a little bit above 60% but still 7:19:17really nice retracement setup. And of 7:19:20course, TP1 would have been this prior 7:19:22high. And then TP2 would be the next 7:19:24target, which I said was around N bucks,7:19:26and we hit around 8.95 7:19:29on that setup. If you look at the 7:19:3015-minute, it looked really, really 7:19:32solid, too. So, I always like to look 7:19:34for multiple time frame alignment. We 7:19:36got a we had a nice green bar, red bar,7:19:40and a nice dogee bar. I like dogee bars,7:19:42right? So, entry above the dogee bar,7:19:44stop loss directly below. So, you could 7:19:46have taken this retracement setup also 7:19:48off the 15. And by the way, we kind of 7:19:50got one, you know, later in the day,7:19:52even though I didn't really like this 7:19:53one. It was a really deep pullback. But 7:19:55hey, if you wanted to trade this 7:19:56retracement setup right before the 7:19:58close, you could have entered above this 7:20:00little base, above these candlesticks,7:20:02stop-loss directly below. Let's look at 7:20:04the RKLB Rocket Lab Corporation. And 7:20:08this was a few months ago, but I 7:20:09remember taking this trade and this was 7:20:11just a fantastic retracement setup. We 7:20:14had a very minor gap up from 2540 to 7:20:182665. So we were just clearing above 7:20:21this resistance and that small little 7:20:23gap up actually gave me a bullish bias 7:20:26on the day. We were clearing above this 7:20:27resistance and I thought we had upside 7:20:29to move higher until this prior 7:20:32resistance area. So we go to the 7:20:34fiveinut time frame. All right. And we 7:20:38got a really nice retracement setup 7:20:41here. Green bar. We got one big red bar.7:20:44Then a small little kind of uh topping 7:20:47tail, narrow range bar, right? So entry 7:20:50above, stop-loss below. And obviously 7:20:53this had really nice follow-through, but 7:20:54I think this was actually way nicer on 7:20:56the two-minut time frame. So I always 7:20:59like to look at multiple time frames,7:21:01and that gives me a lot better of a 7:21:02perspective on what that stock is 7:21:04actually doing. And as you can see on 7:21:06the two-minute, it was actually much 7:21:07nicer. Nice move up, red bar, bottoming 7:21:11tail, and then we had like two dogee 7:21:13bars in a row. Really nice. So, we 7:21:15didn't see three to five red bars in a 7:21:18row, but it didn't matter because it was 7:21:19still a really nice retracement setup.7:21:22Entry above, right? Stop loss directly 7:21:25below. And you could have even entered 7:21:27it here. Let's say you missed this 7:21:29setup. It moved up kind of based. You 7:21:31could have put your entry here, stop 7:21:33loss directly below. I would say this 7:21:35would be a little bit tougher because 7:21:36it's right into the prior high. But of 7:21:38course, it didn't matter. It continued 7:21:39up and even here had a nice little 7:21:42retracement setup. Moved up, retraced 7:21:44three red bars, bottoming tail. You 7:21:46could have even even played this. I 7:21:48wouldn't have and I didn't, but you 7:21:50know, in theory, this is also a 7:21:51retracement setup. Entry there, stop 7:21:53loss above, and you would have taken 7:21:55profits at the previous target. Let's 7:21:58look at another one. And this was on 7:21:59APLD just a few months ago as well.7:22:02terrific trade that I called and 7:22:04actually executed on. And APLD had a 7:22:07nice move up retracement almost had a 7:22:10retracement setup here into the rising 7:22:1220 uh four red bars in a row and it 7:22:15triggered this retracement setup on a 7:22:17gap. So we gapped up triggered that 7:22:20setup and of course we had really nice 7:22:22follow-through to the upside and I 7:22:24traded it on the day of the gap. So this 7:22:26gap was gapping above those four red 7:22:28bars above resistance. I thought it was 7:22:30really interesting. It gave me a bullish 7:22:32bias on the day. And if we go to the 7:22:34fiveminute time frame, we got, you know,7:22:36basically a picture perfect, you know,7:22:38retracement setup. Nice move up. Three 7:22:41red bars in a row. Then we had a 7:22:43bottoming tail, narrow range bar close 7:22:46to the 20 MA. Okay, around a 60%7:22:50retracement or so, you know, a little 7:22:51bit more than that, but still really 7:22:53nice. And entry would have been over 7:22:56that candlestick. Stop loss directly 7:22:58below. And of course, it hit target one.7:23:01It actually exceeded target. In fact, we 7:23:04kind of got another retracement here and 7:23:05another retracement setup here that you 7:23:07could have played. So, really nice 7:23:09setups. And even though we didn't hit 7:23:11every single criteria, it's still an 7:23:13effective setup because we combined the 7:23:16daily time frame and looking at the gap 7:23:19and establishing that bullish bias, we 7:23:22knew that there was a bullish direction.7:23:24There was a bullish catalyst. and we 7:23:26combined that catalyst with a 7:23:28retracement setup on the intraday time 7:23:30frames. Let's look at some retracement 7:23:31setups that actually work the other way 7:23:33that actually worked as shorts. So, this 7:23:36stock gapped from 2022 7:23:38to 1888 the next day. So, this was like 7:23:42a 6% gap down, but notice how it was 7:23:44gapping below the 200 and below a lot of 7:23:47this resistance. So, really bearish gap 7:23:50down. I had a bearish bias for this 7:23:52stock on that day and we got a picture 7:23:55perfect almost power trend lower. But 7:23:58take a look at this retracement. We move 7:24:00down. We had three green bars in a row.7:24:03Remember, we want three red bars. If 7:24:05we're looking to go long, if we're 7:24:07looking to go short, we want three green 7:24:09bars in a row. 40 to 60% retracement 7:24:12into the golden zone near the 20 MA. So 7:24:15nice and entry right below these 7:24:19candlesticks, stop loss directly above 7:24:21and then literally every single time it 7:24:23retraced near to the 20 MA, it actually 7:24:26just continued lower. So beautiful 7:24:28picture perfect retracement setup um you 7:24:32know in the opposite direction where we 7:24:34would be going short instead of long. So 7:24:36all the criteria that I just taught you,7:24:38it would just be the opposite if you're 7:24:40going short. Let's take a look at the FN 7:24:42KO. And I remember this setup very 7:24:44clearly because I couldn't get filled on 7:24:46it. And it was an unbelievable trade,7:24:48but I couldn't get filled any shares 7:24:51short on my Thinker Swim. I just 7:24:53couldn't get a fill, so I couldn't take 7:24:54advantage of it. But this was gapping 7:24:56from 365 that day to around uh 298 the 7:25:01next day, around 18% gap down. This 7:25:04stock had a nice move down based and it 7:25:06triggered this breakdown via a gap on 7:25:09the daily chart. So I had a bearish bias 7:25:11going into this day. And if we go to the 7:25:14fiveinut time frame, we could see a 7:25:17beautiful just beautiful retracement 7:25:20setup right here. It's a little bit 7:25:21choppy because Trading View doesn't 7:25:23really like represent this data all that 7:25:26well. But we had a nice move down 40 to 7:25:2960% retracement. Not a perfect 7:25:31retracement, but it was still good 7:25:33enough to take. Um near the 20 MA,7:25:36right? 20 MA was starting to catch up to 7:25:38price. And basically the entry would 7:25:40have gone under 264 or under 265 stop 7:25:45loss 275 and it was a 10-cent stop and 7:25:47this thing dropped all the way to 232.7:25:50So unbelievable trade. This was actually 7:25:52scalpable as well. Really nice 7:25:54retracement setup for a short and in 7:25:56fact it worked as a retracement here. It 7:25:59retraced to the 20 MA kind of based 7:26:01dropped retraced to the 20 MA dropped 7:26:03but at this point it formed a higher 7:26:05low. So, you know, this that's obviously 7:26:07a red flag and it obviously start to 7:26:09kind of transition higher after that.7:26:11But beautiful retracement setup to the 7:26:13downside. Like I said, entry under 265,7:26:17stop loss [snorts] 275. And if you look 7:26:19at the 15-minute, I mean, look at that.7:26:21Really nice, nice move lower. Couple of 7:26:24green bars. We had a dogee bar here and 7:26:26beautiful continuation to the downside.7:26:28Hopefully, you found tremendous value in 7:26:30this video. And I want you to actually 7:26:32test this strategy first in your own 7:26:35trading with either paper trading or 7:26:38really small risk so you could develop a 7:26:40feel for trading the retracement setup 7:26:43and you could practice applying all of 7:26:45the criteria that I've taught you today.7:26:48All right, before you actually use 7:26:50significant risk, I want you to test it 7:26:51out. I want you to kind of develop your 7:26:53own intuition for this setup and be 7:26:56selective with your trades. Don't just 7:26:59take any retracement. I pass on like 7:27:02over 95%7:27:04of the dip opportunities I see in the 7:27:07markets because I only like to go for 7:27:09high quality A+ retracements. So, make 7:27:12sure you're paying attention to these 7:27:13criteria and make sure you're practicing 7:27:15this setup before you actually use heavy 7:27:17risk. Let me know in the comments what 7:27:19you think about this strategy and 7:27:20whether you think it's going to be very 7:27:22effective for your trading plan. Make 7:27:24sure you leave a like on this video and 7:27:27make sure you subscribe to the channel 7:27:28for my other education. And lastly, make 7:27:31sure you get started with my free 10 7:27:33plus hour trading course. Like I said,7:27:35it is genuinely better than most paid 7:27:37courses on the internet. And you're 7:27:38going to find that out and you're going 7:27:40to learn more about this strategy in my 7:27:42free course as well. So, I will see you 7:27:44on the next video. Thank you so much for 7:27:46watching. What's going on, guys? Hope 7:27:48you're having a great day. We just 7:27:51talked about the buy setup, but now 7:27:53we're going to be talking about the sell 7:27:55setup, which is the exact opposite of 7:27:58the buy setup, except we're going to be 7:28:00shorting instead of going long. So,7:28:03we're not going to spend as much time on 7:28:05the sell setup as we did on the buy 7:28:07setup since it's exactly the same 7:28:10concept except, you know, obviously it's 7:28:12the opposite. So, let's just get right 7:28:14into it and we'll do a quick little 7:28:15class here. Sell setup. What is it? It's 7:28:18the opposite of a buy setup. We're going 7:28:20to be shorting the retracement rally,7:28:23right? So, we know how uh if we have an 7:28:25uptrend, if we have a rally, we have a 7:28:27dip. Same thing when we have a 7:28:30downtrend, right? We drop, we also have 7:28:33a little bit of a retracement rally.7:28:35It's one of the most potent strategies 7:28:37for day swing trading. works in any time 7:28:39frame, stocks, crypto, forex, and it's 7:28:42really important to just develop the 7:28:44skills required to recognize one and 7:28:46recognize um when you have a quality 7:28:48sell setup. So guys, same idea here. We 7:28:52drop, we need to correct in some way 7:28:55after this large drop. Maybe some people 7:28:57need to cover their shorts. Maybe some 7:29:00people are buying it down down here in 7:29:02hopes that it's bottoming. Um but we 7:29:04have a retracement rally, right? And 7:29:06this is where we want to time our sell 7:29:08setup. This is when we want to get in so 7:29:10we enjoy the move lower. And then of 7:29:13course we could cover here um or 7:29:17um you know stick with the play and we 7:29:19see we have that retracement rally and 7:29:21we could we have another sell setup and 7:29:23we short it here and enjoy the move 7:29:25lower. Okay, we must have a downtrend in 7:29:29order to play the sell setup. Just like 7:29:31we need we need an uptrend when we're 7:29:33buying the dip, when we're, you know,7:29:35doing a buy setup, we need an 7:29:37established downtrend when we are 7:29:40trading the sell setup. Guys, don't 7:29:43overthink this. It's the exact same 7:29:46thing except it's the opposite. Key 7:29:49criteria number one, um, after a huge 7:29:53drop, we need to have three or more 7:29:56consecutive green bars in a row with 7:29:59higher highs and higher lows. Right?7:30:01This high is higher than this high. This 7:30:03higher is high is higher than this high.7:30:05And this high is higher than that high.7:30:07Okay? Three consecutive green bars and 7:30:09ideally consecutive higher highs and 7:30:12consecutive higher lows. Okay? It's the 7:30:15same exact thing. we are basically um 7:30:18analyzing the quality of the 7:30:20retracement. Okay, same thing here guys,7:30:23the 20-day moving average requirement.7:30:25Remember, when we're downtrending, when 7:30:27we're shorting, we want the moving 7:30:30average to be trending lower and we want 7:30:33it to be over price. Trending lower and 7:30:36over price. So, we drop from the 20-day 7:30:40moving average and then we retrace right 7:30:42back to it here. Okay,7:30:45same thing guys. 40 to 60% retracement.7:30:48Um, if this retrace is too much, then 7:30:51it's, you know, clearly too strong,7:30:53right? We're trying to short. We're 7:30:55looking for weakness. If it rallies all 7:30:57the way up here, then it's clearly not 7:30:59all that weak because otherwise, if 7:31:01there was really that much selling 7:31:03pressure, the sellers wouldn't allow 7:31:05there to be a retracement to here.7:31:08Similarly, um, if we only retrace to 7:31:11right here, there's still extension from 7:31:13the 20-day moving average and a full 7:31:15correction hasn't been made. So, we're 7:31:18looking to the 40 to 60% area. In this 7:31:21case, it's around 50%. Okay. So, we have 7:31:24a we drop 40 to 60% retracement.7:31:29Our entry and stop loss, it's the exact 7:31:32opposite. uh once our entry bar has 7:31:34formed, we put our entry under the entry 7:31:37bar. We put our stop loss over the entry 7:31:39bar since we are shorting. So we would 7:31:42be entering during this red bar when it 7:31:44hits uh the lows of this entry bar.7:31:47Okay? And our t our target is the 7:31:49previous pivot low. Same exact thing 7:31:51guys, just opposite.7:31:54Entry bars, as we're aware, it makes it 7:31:57an enhanced setup. Ideally, we have 7:32:00narrow range bars or small topping 7:32:02tails. Right? Before on the buy setup,7:32:04we wanted bottoming tails because a 7:32:07bottoming tail shows that the buyers 7:32:09have taken control. With a topping tail,7:32:11it shows us the sellers have taken 7:32:13control, which is what we want when 7:32:14we're shorting. So, we obviously want an 7:32:17entry bar. It improves our reward to 7:32:20risk. Okay. Obviously, here the green 7:32:23bars are becoming smaller. Um the b the 7:32:26buying is weakening compared to this. We 7:32:28we have an entry bar here. We don't have 7:32:30an entry bar there. Okay, same thing.7:32:33And the exact same idea, guys. With an 7:32:36entry bar, we have a tighter stop-loss.7:32:38We have a higher reward to risk. This is 7:32:41why we want entry bars. Stop loss is at 7:32:43six bucks. Our entry is at 590. We're 7:32:46shorting it. Remember, here our entry is 7:32:48at 560, stop loss at six bucks, right?7:32:51Same target, same stop loss, different 7:32:54entries because we don't have an entry 7:32:55bar here. And in this case, we're 7:32:58risking 10 cents to make 40 cents. I'm 7:33:02sorry. We're risking 10 cents to make 50 7:33:03cents. In this case, we're risking 40 7:33:06cents to only make 20 cents. Okay.7:33:10Obviously, the reward to risk is a lot 7:33:12better here because we have that entry 7:33:14bar. We have a tighter stop-loss and our 7:33:17risk-to-reward is a lot better. Okay.7:33:20Okay, guys. Let's look at some examples.7:33:23Right, the 20-day moving average is 7:33:25starting to curl over price and is 7:33:27declining now. Right, especially it's 7:33:29curling over and we have a drop. Then we 7:33:33have a base we have a base breakdown 7:33:35here actually. So we have a drop base 7:33:37base breakdown. We break down, right?7:33:41Then we have that retracement. We have 7:33:44three or more consecutive green bars in 7:33:46a row. We have a topping tail, right? In 7:33:50fact, we have a topping tail and a 7:33:53really nice small entry bar. Um, in this 7:33:56case, guys, I know technically we're 7:33:58supposed to put our stop loss over the 7:34:00entry bars high, but in this case, since 7:34:02the topping tail is higher, we're going 7:34:04to put our stop loss there. Okay, we in 7:34:07general want the stop loss to be over 7:34:09the absolute highs of the sell setup,7:34:12right? Our entry would be under this bar 7:34:15as this bar is forming. So, as soon as 7:34:17it hits the lows, we enter and the 7:34:19target is a previous low. Beautiful,7:34:21beautiful sell setup. Um, this is 7:34:23around, I'd say, 60% retracement. So,7:34:27beautiful sell setup. Perfect um example 7:34:31of this. And notice how the we it's 7:34:33right into the declining 20-day moving 7:34:35average. It literally stops at the 7:34:37moving average. This is why the moving 7:34:38the 20-day moving average is so 7:34:40important.7:34:42Same thing here, guys. The 20-day moving 7:34:44average is dropping. It's trending 7:34:46lower. We have a huge drop. Three or 7:34:48more consecutive green bars in a row. We 7:34:51have a, you know, kind of larger um a 7:34:55larger entry bar than we want. However,7:34:58it's still good. We are our stop loss is 7:35:00right here. Entry right here. And we 7:35:03actually surpass our first target.7:35:06Notice how it went right to the 7:35:07declining 20-day moving average. That's 7:35:09when we had our drop. And we actually 7:35:11did another one here where we rallied 7:35:13it. This is not a perfect sell setup,7:35:15but still entry bar, entry bar, and we 7:35:18continue lower.7:35:20Okay, hopefully that makes sense. We 7:35:21also have higher highs on each of these 7:35:24green bars. Just really, really nice 7:35:26setup. Same thing here. This one's a 7:35:29little sloppy. We have a prior support 7:35:31here that becomes a resistance for the 7:35:35sell setup. We drop this one's a bit 7:35:38sloppy entry bar, but nevertheless, it's 7:35:40a sell setup right into the declining 7:35:4120-day moving average. It kind of went 7:35:44above the 20-day moving average, but 7:35:45that's not a big deal. It's never going 7:35:47to be perfect every time. Okay, really 7:35:49nice sell setup. And notice this is 7:35:53supposed to say sell setup, but not 7:35:55every sell setup is perfect. You have to 7:35:57look at the overall context of what's 7:35:59happening. And remember guys, if you're 7:36:00having uh troubles with this setup, it's 7:36:03exactly like the buy setup. It's just 7:36:05the opposite. You're shorting. You're 7:36:06taking advantage of the and making money 7:36:08off the price moving lower. A key idea 7:36:12here is, guys, remember, use the 20-day 7:36:14moving average to your advantage. And 7:36:17once again, you're you're seeing that 7:36:18we're combining all of these ideas to 7:36:20make a to produce a really potent 7:36:23trading setup that has a high likelihood 7:36:26of success. Okay? By combining different 7:36:29ideas and different elements of what 7:36:32we're learning in this course, we're 7:36:34going to be able to combine everything,7:36:37right, and find setups that are 7:36:40extremely high quality and have a high 7:36:43likelihood of success and high 7:36:46likelihood of, you know, making money.7:36:48That's what we're here to do. So,7:36:50hopefully this makes sense, guys. This 7:36:51is basically like buying the dip except 7:36:54you're shorting the rally, right? So,7:36:57you guys know all the requirements. And 7:37:00something I want to emphasize just like 7:37:01I did with the just like I did with the 7:37:05uh up with the buy setup class is make 7:37:08sure there's an established downtrend.7:37:11Okay? Don't trade the sell setup if you 7:37:15have an uptrend. Don't trade the sell 7:37:17setup if the charts are looking bullish.7:37:20If the charts the charts are showing 7:37:22buying pressure, look at several time 7:37:24frames. Look at the daily, right? Look 7:37:26at the hourly. Look at the weekly. Maybe 7:37:29look at the smaller time frames such as 7:37:31the 15, five, or 1 to 2 minute charts 7:37:34and see what's going on. Are we bearish?7:37:37Do we have clear selling pressure? Do we 7:37:39have a downtrend? Or do we have conflict 7:37:42on the time frames? Do we have some time 7:37:44frames looking higher? Some time frames 7:37:46looking lower, some time frames maybe 7:37:48sideways. You don't want to trade that.7:37:50You want to trade the sell setup when 7:37:52there's clear bearishness on multiple 7:37:55time frames and when you have 7:37:56established downtrends on multiple time 7:38:00frames. Okay, that's something that's 7:38:01really really important. And same thing 7:38:04with the base breakout and the the base 7:38:06breakdown as well. I didn't really cover 7:38:08it before, but um you you want to trade 7:38:11the base breakout when you have an 7:38:13established uptrend on several different 7:38:15time frames. When several different time 7:38:17frames are showing that it's bullish,7:38:19just like you want to trade the base 7:38:21breakdown when several different time 7:38:23frames are showing bearishness, showing 7:38:25that there's selling pressure. If you 7:38:27guys don't get the idea at this point,7:38:30uh definitely go back and watch my 7:38:31multiple time frame analysis video. You 7:38:34guys get the idea here. You want the 7:38:35multiple, you want multiple time frames 7:38:37to all be in agreeance. And once they 7:38:39are, then you could start finding these 7:38:41setups that we're learning. Okay,7:38:44awesome guys. We have now learned two 7:38:47different strategies, right? The buy 7:38:49setup and the breakout and the 7:38:52respective sell setup and base 7:38:54breakdown. And boom, now you guys are 7:38:57ready to begin trading them. So maybe 7:39:00try to look for some on your charts. Try 7:39:02to practice. Maybe come to my live 7:39:03streams and ask me questions about 7:39:05whether you found one or not. But 7:39:08perfect. Make sure you guys really 7:39:09understand the requirements that go into 7:39:11the strategy. Anyway guys, we're going 7:39:14to be discussing the one two three 7:39:16pattern next. See you there.7:39:19What is going on guys? Hope you're 7:39:21having a great day. Today we're going to 7:39:23be talking about another strategy that 7:39:25we're going to add to our trading 7:39:27arsenal. We already talked about the 7:39:29breakout/breakdown 7:39:31and the buy setup and sell setup. But 7:39:33today we're going to be talking about 7:39:35another type of strategy and the best 7:39:38way to sum up this strategy. It's uh a 7:39:41continuation play. Okay, so we already 7:39:44discussed and looked at a diagram 7:39:46showing how price corrections occur and 7:39:49how we take advantage of price 7:39:51corrections through either buying you 7:39:55know after a base or through buying a 7:39:57pullback or you know shorting a base or 7:39:59shorting a retracement. Okay, but let's 7:40:02talk about what happens if let's say you 7:40:05miss the initial breakout or you miss 7:40:09the buy setup. Right? So let's say we 7:40:11have a breakout or let's say we have a 7:40:14rally first and then we get a base we 7:40:16get a consolidation and of course we're 7:40:18looking to play the breakout right and 7:40:20similarly let's say we have a rally and 7:40:24then we get that price correction and we 7:40:26get a pullback 7:40:28okay so what happens if you miss this 7:40:34initial breakout and you miss this 7:40:37initial buy setup right let's say Maybe 7:40:40you weren't at your trading desk. Maybe 7:40:43uh you know, you're coming late to the 7:40:44party and you weren't able to catch the 7:40:48initial breakout. Okay, the initial 7:40:51breakout here or the um the buy setup 7:40:54here, right? What do what do you do?7:40:57Right? Maybe you know you still want to 7:40:59take advantage of the play and you may 7:41:02ask yourself, okay, I missed the initial 7:41:04entry. Is there any way I could get into 7:41:07this position through a secondary entry?7:41:10Okay. Right. So, maybe you missed this 7:41:13initial breakout, but you get another 7:41:14opportunity here before it inevitably 7:41:17continues higher. Or maybe you get an 7:41:19opportunity right here to get in before 7:41:22it continues higher. Right? So, the 7:41:25whole point of this setup is to talk 7:41:27about the one 123 pattern. That's what 7:41:30it's called. And it's a continuation 7:41:32play. This setup 7:41:35is basically trying to catch the 7:41:39continuation of the move. It's a 7:41:42secondary entry. Okay, so let's get 7:41:45right into what it looks like. Okay, so 7:41:47the first requirement that you need for 7:41:50the one, two, three pattern 7:41:52is a and a bullish one two three 7:41:56pattern, right? where one where we're 7:41:57actually going to go long is we need a 7:41:59bullish wide range igniting bar first.7:42:02Right? So remember we talked about what 7:42:04an igniting bar is. Okay? So we need a 7:42:07bullish wide range igniting bar. We 7:42:10don't want to see a large candle up 7:42:12here, right? Or I mean a large wick. We 7:42:14don't want to see a large wick or tail 7:42:17on this bullish igniting bar. And this 7:42:20igniting bar, the reason it's called an 7:42:22igniting bar is that it ignites the move 7:42:25higher, right? This is the first bar 7:42:28that is igniting the next move. Um, so 7:42:32it's going to indicate the direction of 7:42:33the move. In this case, it's higher,7:42:35right? Shouldn't have a significant 7:42:36topping tail. We talked about that. And 7:42:40the next bar we have here is a resting 7:42:42bar. And this resting bar, it's usually 7:42:46a narrow range bar or sometimes a dogee 7:42:49candle. Okay? And this resting bar has 7:42:53to form and stay in the top 33% of the 7:42:58igniting bar, meaning it has to be 7:43:01ideally in the top third of this 7:43:03candlestick. You're not always going to 7:43:05see that. Sometimes the resting bar is a 7:43:08little larger. It's not a big deal if 7:43:10that's the case, but ideally, you know,7:43:12if we're just talking about the 7:43:13textbook, the textbook version of this 7:43:16pattern, you want to have a resting bar 7:43:19that's in that's, you know, in the top 7:43:2133% of this igniting bar. You can see 7:43:23this one is, you know, in the in the top 7:43:26third of this bar. It doesn't matter if 7:43:28it's green or red or if it's if it's a 7:43:30dogey candle. That doesn't matter. And 7:43:33ideally, you want it to form an equal or 7:43:36near equal high with the igniting bar.7:43:38meaning you want the high of this 7:43:39resting bar to be near the high of this 7:43:42igniting bar. Right? In this case, we're 7:43:44kind of near the high because what it 7:43:46ends up forming is a double top or an 7:43:49area of resistance. Okay? And the reason 7:43:53why we want to have an area of 7:43:54resistance is whenever we get the 7:43:56triggering bar, right? This is the bar 7:43:58that where we would actually enter this 7:44:01pattern, right? We want the trigger to 7:44:04happen when it breaks that resistance,7:44:07right? And as soon as it breaks that 7:44:09resistance, that' be confirmation that 7:44:11we're going to go higher. And that's 7:44:13when we enter. So you're entering above 7:44:15the highs of the igniting bar and the 7:44:19resting bar. Whichever one is higher,7:44:22right? So if it's equal highs between 7:44:25these two bars, great. But let's say in 7:44:27this case, um, the igniting bar is a 7:44:30little bit higher than the resting bar,7:44:33right? You're going to place your entry 7:44:34above the highs of either these two 7:44:37candles. So, whichever one is higher,7:44:39that's where you're going to be placing 7:44:40your entry. And you're going to be 7:44:42placing your stop loss uh under the low 7:44:46of the resting bar, okay? Or under the 7:44:49low of the triggering bar, whichever one 7:44:51is lower, right? So, let's say that 7:44:53there's a maybe a large tail, maybe 7:44:55there's a tail here in your triggering 7:44:57bar. You're going to be placing it at 7:44:59the lows. So, at the lows of either the 7:45:00resting candle or the lows of the tri uh 7:45:04of the triggering bar. So, this isn't 7:45:06really hard stuff, guys. You have an 7:45:08igniting candle, right? Then you get a 7:45:10resting bar, a narrow range bar, uh or 7:45:13perhaps a dogee candle, and right, so 7:45:16it's a one, two, and then we're on the 7:45:19third bar. That's where we're going to 7:45:22be actually that's a triggering bar.7:45:24That's where we're actually going to be 7:45:25entering and placing our stop. Okay, so 7:45:29let's look at the opposite, the bearish 7:45:31setup, where we're going to actually be 7:45:33shorting the 123 pattern. We first have 7:45:36the wide range igniting bearish bar.7:45:39Ignites the move lower. It indicates the 7:45:42direction of the move. We shouldn't have 7:45:44a significant tail here, right? We 7:45:46shouldn't have a significant bottoming 7:45:47tail, right? When it's a bullish wide 7:45:49range bar, you're not going you're not 7:45:52supposed to have large tails, right? So,7:45:54you you definitely don't want to have a 7:45:56large bottoming tail here. Okay. So,7:45:59that's the igniting bar. The next we 7:46:01have the resting bar that's forming and 7:46:04staying in the bottom 33% of the 7:46:06igniting bar. So it's has to kind of 7:46:08form and stay in the bottom third of 7:46:11this igniting bar. It's not always going 7:46:14to do that in trading. Nothing is ever 7:46:16really, you know, exactly perfect, but 7:46:19ideally the textbook version, you want 7:46:21to have this uh resting candle be in the 7:46:24bottom 33% of this igniting bar. It 7:46:27doesn't matter if it's green or red. And 7:46:29ideally, you want it to form um near 7:46:32equal or equal lows with the igniting 7:46:34bar, right? You want the low of this bar 7:46:36to be near the equal or or near the low 7:46:39of the igniting candle because that's 7:46:42going to create an area of support. And 7:46:44once that support is broken during the 7:46:47triggering bar, that's where we're 7:46:48placing our entry, right? So the entry 7:46:51is going to be under the igniting bar or 7:46:55under the resting bar. Whichever one is 7:46:58lower. So find the absolute low of the 7:47:00igniting bar, the absolute low of the 7:47:02resting bar. Whichever one happens to be 7:47:04lower, you're going to place your entry 7:47:06under that. Okay? And you're going to 7:47:08short immediately when the bar goes 7:47:10below the no below the lows of the 7:47:12igniting resting bar. We just talked 7:47:14about that entry. We just talked about 7:47:15that. stop loss is going to go over the 7:47:18highs of either the resting bar or the 7:47:20trigger triggering bar, whichever one's 7:47:22higher. Usually, it's going to be over 7:47:25the highs of the resting candle. So,7:47:26you're going to place your stop loss um 7:47:28over the highs of the resting candle,7:47:30right? So, you have a one, you have a 7:47:32two, so you have an igniting one, a 7:47:35resting two, and then the third candle 7:47:37is going to be our triggering bar.7:47:40And the one 123, by the way, whether 7:47:43it's bullish or bearish, uh it could 7:47:46really be played on any time frame.7:47:49Uh yeah, it it works on any time frame 7:47:51for crypto stocks. So,7:47:55you shouldn't have a problem, you know,7:47:57beginning to uh immediately take 7:47:59advantage of using this setup. Uh so,7:48:02let's talk about what I meant by it's a 7:48:05continuation pattern. Okay, so you guys 7:48:09should immediately recognize what we 7:48:11have here. We have a rally. We have a 7:48:13rising 20-day moving average that is 7:48:16under price. Perfect. We have a rally 7:48:19stemming from the 20, right? It's coming 7:48:21from the 20. Perfect. And we begin to 7:48:23base. We have our shakeout bar.7:48:26Remember, what does the shakeout bar 7:48:28tell us during a bullish base? It gives 7:48:30us confirmation that the stock or the 7:48:32crypto is indeed higher. Okay, it's an 7:48:35enhancer. We talked about that uh during 7:48:38one of our classes. So we have a bullish 7:48:40base at the highs and of course we have 7:48:42our base breakout. So the initial entry 7:48:46for this trade is for the base breakout.7:48:49Right? This is our entry point. It's 7:48:51over the highs of the base. That's our 7:48:53entry. That's the first setup for this 7:48:55stock. Right? But let's say you missed 7:48:58it. You weren't able to take advantage 7:49:00of the entry for the base breakout.7:49:02Maybe, you know, you were you weren't 7:49:05really confident that this stock or 7:49:07crypto was actually bullish and you 7:49:09wanted to wait for the next setup. Maybe 7:49:11that maybe that's what happened or maybe 7:49:13you just missed it. You didn't see it.7:49:15But the sec the one 123 pattern then 7:49:18gives us uh an option to get into the 7:49:20stock or crypto after the breakout.7:49:23Right? So where then we have the 7:49:24igniting bar, the breakout happened,7:49:26right? We broke out and then all of a 7:49:29sudden we get the resting bar. We get 7:49:31the one two three pattern and now you 7:49:33can enter over 7:49:36uh you know the highs of the igniting 7:49:38bar here. Enter over the highs and you 7:49:40put your stop loss under the resting 7:49:43candle and boom now you have a 123 7:49:46pattern. So this is going to serve as a 7:49:48secondary entry into the stock or crypto 7:49:51in case you missed out the initial 7:49:53breakout. Okay.7:49:56And in general, guys, the igniting bar,7:49:58right, we talked about the igniting 7:50:00candle, this usually has to stem from 7:50:05either a base or from a buy setup. Okay,7:50:09that's why it's igniting a new move,7:50:11right? This this can't we're actually 7:50:14going to talk about in a second here,7:50:15but this can't you know you really can't 7:50:19have an igniting candle unless it's 7:50:22coming from a consolidation or a buy 7:50:25setup. You need that, right? And here we 7:50:28have a 123 pattern stemming from a buy 7:50:30setup. Right? So let's say you have the 7:50:32rising 20-day moving average that is 7:50:33under price. You have the rally, you 7:50:36begin to pull back, you have your buy 7:50:38setup where your buy setup entry would 7:50:40be over this candle, right? Stop loss 7:50:43under this candle or under the 20. We 7:50:46have our initial 7:50:48u igniting bar, right? The buy setup 7:50:51worked. It triggered, right? Our entry 7:50:53was right here. It worked. But let's say 7:50:55you missed this entry or maybe you were 7:50:57skeptical that it was really going to 7:50:59work and you decided to pass on this 7:51:01setup. Then it gives you a resting bar,7:51:05let's say. And now you're going to be 7:51:06able to play it as a one, two, three 7:51:07pattern where your entry is right over 7:51:10these two candlesticks. Stop loss is 7:51:12under this candlestick and that 7:51:14candlestick. Okay? So you could see that 7:51:17the igniting candle, right, it it's 7:51:21always it always has to stem from either 7:51:24a base or a pullback, right? Because the 7:51:28igniting candle ignites a new move 7:51:30higher.7:51:32And this kind of brings me to this 7:51:34point. Look at this candlestick. Is this 7:51:39considered a one two3 pattern? What we 7:51:42have here, right? We have this green bar 7:51:44and then we have the resting candle,7:51:47right? And let's say we continue higher.7:51:49Is this considered a one two3 pattern?7:51:52And pause your video and really think 7:51:54about it. Okay, so I'll give you guys 7:51:56the opportunity to do that.7:51:59Okay. And 7:52:01it's not right. The move was already 7:52:05ignited. A one, two, three must have an 7:52:08igniting bar that starts the move. We 7:52:12just talked about it, right? This move 7:52:14has already been ignited. We're already 7:52:16up four green bars in a row before we 7:52:20get this one, two, three. This is not an 7:52:23igniting bar. This is just I mean, this 7:52:26is really just continuing the move 7:52:27higher.7:52:29But that's not what we want here. We 7:52:31want the first bar to be an igniting 7:52:34candlestick. It has to stem from either 7:52:36a buy setup, you know, meaning has to 7:52:39stem from a pullback or from a base. It 7:52:42ignites. It's really important. You 7:52:44wouldn't believe how many questions I 7:52:46get about this. And they'll give me an 7:52:48example like this and they'll be like,7:52:49"Is this a one two three?" No, it's not 7:52:51a one two3 because this candle is not 7:52:54igniting a new move higher. Okay,7:52:58so let's continue. What's the benefits 7:53:00of this trade? Well, number one, it 7:53:01creates a higher reward to risk setup,7:53:04right? We talked about reward to risk.7:53:06Um, but you know, it usually gives us a 7:53:08pretty tight stop loss, which is really,7:53:10really nice. We know that the tighter 7:53:12the stop, the better reward to risk.7:53:14And like I said, if you miss the 7:53:16breakout or the buy setup, you could use 7:53:18the 123 as a secondary entry. It gives 7:53:20you another opportunity to take 7:53:22advantage of the trade. And it also, you 7:53:25know, it kind of gives you confirmation.7:53:27The stock has already proved that it's 7:53:29bullish due to the successful breakout 7:53:32and you're just trading the continuation 7:53:34of the move, right? This has already 7:53:36proved that it's bullish, right? We 7:53:38broke out. We have the igniting candle.7:53:40This the trade is telling you, hey,7:53:42we're bullish. We're probably going to 7:53:44continue higher here. And then you get 7:53:45the one, two, three, and boom, you can 7:53:47take advantage of the continuation 7:53:48higher. Okay, let's look at some example 7:53:51here. Examples here. We have the 200 day 7:53:54moving average. It's flat and 7:53:56underpriced. Perfect. We actually have a 7:53:58buy setup here, which is it's not a 7:54:00clean buy setup because of the 20-day 7:54:02moving average, right? It's not under 7:54:03price. It's kind of like moving through 7:54:05price, but nevertheless, we have a 7:54:07rally. We have a a retracement. Notice 7:54:09how right here, the 20-day moving 7:54:11average starts to point higher, and 7:54:13boom, we get an igniting bar. We get our 7:54:17resting bar and then we get our 7:54:20triggering bar. And our entry would be 7:54:22over the highs of the igniting bar and 7:54:26the resting bar. So it'd be right here.7:54:29Our stop loss would go right below the 7:54:31resting bar. And this is a 1, two,7:54:33three, right? 1 2 3. Perfect. We could 7:54:38see also the resting bar is in the top 7:54:3933% of this candle. Awesome. Let's look 7:54:43at another play. We have a rising 20-day 7:54:46moving average, right? It's starting to 7:54:48curl higher. We get the wide range bar.7:54:51We get our resting bar and then we get 7:54:53the triggering bar completing the one,7:54:55two, three. So you guys could see this 7:54:58is the definition of igniting bar,7:55:00right? We're kind of sideways here where 7:55:02there's it's trendless, right? We're not 7:55:03really doing anything and we boom ignite 7:55:07right out of that sideways trend and we 7:55:09begin to start a new trend, right? So I 7:55:12guess you can call this a base. It's a 7:55:14really sloppy base. Like I know I said 7:55:16that you t you want to have the igniting 7:55:19bar um stem from a base or a buy setup,7:55:22but sometimes you're going to have a 7:55:23sideways trend like this where you know 7:55:27price begins to break out of that 7:55:28sideways trend with a large igniting 7:55:30bar. I mean notice the size of this bar.7:55:33This bar is bigger than any other bar on 7:55:35this chart and that's what makes it such 7:55:37a strong igniting candle. Here we have a 7:55:41resting bar. It's not, you know,7:55:42perfect. Ideally, this would be smaller,7:55:45but you know, nothing's ever perfect.7:55:47Our stop loss would go right here. Our 7:55:49entry is over the highs. And we have the 7:55:51one, we have the two, and we have the 7:55:53triggering bar number three. Perfect.7:55:56Let's look at another example. This is a 7:55:58really pretty setup. We have our wide 7:56:00range igniting bar. Um, really, really 7:56:03bullish candlestick right here. We have 7:56:04our resting bar and we have our 7:56:07triggering bar. And this was actually in 7:56:08the beginning of the day. Um I I I don't 7:56:11I forget which stock this was, but this 7:56:14ignited this igniting candle um you know 7:56:18ignited the entire move for the entire 7:56:20day. So we could see that off this one 7:56:23two three we continued higher the rest 7:56:26of the day. We have our resting candle,7:56:28we have our igniting, we have our 7:56:30triggering candle. So let's say you 7:56:32missed the initial breakout down here.7:56:35You were able to capitalize because it 7:56:36gave you a 123. you were able to put 7:56:39your stop loss under the resting candle 7:56:41and entry over. This is literally I mean 7:56:44this is a perfect perfect one 123 7:56:47pattern right here. We also have a 7:56:49rising 20-day moving average. We have 7:56:50kind of a flat 200. Not it's kind of 7:56:53trending but not a big deal.7:56:56All right. So, let's let's take a look 7:56:58here. Okay. And this is a really great 7:57:00example of what what I what I said. Um 7:57:03the one 123 is the best continuation 7:57:05pattern. Right? We have a base right 7:57:07here.7:57:08we actually break under that base,7:57:11right? So, we have a base breakdown with 7:57:13this candlestick. But let's say you 7:57:16missed this initial entry short, right?7:57:20It gave you a 1 2 3 4 actually. So, all 7:57:24a 1 2 3 4 is the exact same thing exact 7:57:28same thing as a 1 2 3 except you're 7:57:31going to have two resting candles. So,7:57:34we have our igniting candle and then we 7:57:36have two resting candles before we have 7:57:39our triggering candle that triggers 7:57:41under the lows of, you know, basically 7:57:44all of these preceding candles. And 7:57:47boom, you could have taken advantage of 7:57:50this, right? Um, you would have placed 7:57:51your entry right under the lows here.7:57:53Your stop loss, you can either place it 7:57:55up here or you could place it over this 7:57:57candle. um whichever one kind of fits 7:58:01your risk management. Um I would have 7:58:04probably placed it over this candle just 7:58:06because I like the reward to risk. It 7:58:09makes it a better reward to risk setup.7:58:11And we actually ended up, you know,7:58:12having a huge tremendous drop before we 7:58:15formed for a sell setup right here and 7:58:18we had another drop. So there's a lot of 7:58:21patterns in here. We have a base 7:58:23breakdown short. Then we have a 1 2 3 4 7:58:27which is like I said the same thing as a 7:58:291 123. Then we continue lower. We 7:58:32actually have a climactic buy setup 7:58:35reversal play which we haven't talked 7:58:36about that yet but we have that here. Uh 7:58:39and that's where you actually play a 7:58:40reversal. Then we have a sell setup. We 7:58:43have a declining 20-day moving average.7:58:45We have the sell setup that worked. And 7:58:47wow I mean there's a lot of lot of 7:58:49strategies that's in this screenshot.7:58:52And you could see that this one, two,7:58:54three, four, one, two, three, four, four 7:58:56served as a secondary entry just in case 7:59:00you missed this initial breakdown. Okay,7:59:03hopefully that makes sense. And that's 7:59:06really it, guys. So, the 123 is not a 7:59:10difficult setup, guys. It's just a 7:59:12continuation play. And you could just 7:59:14see from these examples that it's not 7:59:16that hard. Um, they're pretty easy to 7:59:18pinpoint. Remember, we have to have an 7:59:21igniting candle, right? Um we can't have 7:59:24something like like this, right? This is 7:59:27not a 1 123. It needs to ignite a new 7:59:30move higher. That's the whole point. And 7:59:32this works on any time frame. And 7:59:34hopefully you can begin seeing one 123s 7:59:37on your charts and you can begin um 7:59:40applying them, right, and start actually 7:59:42trading them. All right, guys. Perfect.7:59:44Let me know if you have any questions on 7:59:46that and have a great day, guys. What's 7:59:48going on, guys? Hope you're having a 7:59:50great day. Today, we're going to be 7:59:52talking about another trading strategy 7:59:54and another trading setup that you guys 7:59:57need to add to your arsenal. And this 8:00:00one is going to be focused on picking 8:00:02reversals. It's called the exhaustion 8:00:04and the climactic pattern. And what this 8:00:07strategy is all about is, you know,8:00:10picking reversals with precision. So far 8:00:14with the base breakout, with the buy 8:00:16setup, with the 123 pattern, we've 8:00:19learned how to play with the trend,8:00:21right? If we're in a solid uptrend,8:00:24we've learned how to find setups in that 8:00:27solid uptrend or how to find setups in 8:00:29that downtrend so we could play short.8:00:32But today, we're going to be talking 8:00:33about how to go against the trend. Okay?8:00:37And before I hop into the presentation,8:00:39I want to give you guys a little diagram 8:00:40of exactly what I mean showing you guys 8:00:43this. So, [snorts] let's go to my little 8:00:46drawing area. Okay. Let's say we have a 8:00:5020-day moving average. That's let's say 8:00:54trending higher just like that. Let's 8:00:57make this moving average 8:01:00this orange. And let's say we have 8:01:02price. Let's make this actually yellow.8:01:07Let's say we have price, you know,8:01:11respecting the 20-day moving average and 8:01:13continuing this uptrend.8:01:16Okay. So, let me just draw this real 8:01:19quick. Very good.8:01:22So, right now, and we could even make 8:01:23this a little flatter. Maybe make it 8:01:25more like 45 degrees. Perfect. Okay. So,8:01:30what we have here is a gradual uptrend.8:01:32we have an uptrend that it's just 8:01:34grinding higher and it's gradually 8:01:38continuing higher. Okay, so this isn't 8:01:44where we're going to find a reversal.8:01:46Why? Because price is near the 20-day 8:01:49moving average. We talked about 8:01:52[clears throat] in some of the other 8:01:53classes that extension means extension 8:01:56is when we have distance between price 8:01:58and the 20-day moving average. And we're 8:02:00really going to be diving into this idea 8:02:03of extension during this strategy. But 8:02:05let's say all of a sudden 8:02:08we talked about how the slope of the 8:02:1020-day moving average matters, right?8:02:12And you know the uh the higher the slope 8:02:16is, the more unsustainable the move is,8:02:18right? So right here, let's say we have 8:02:20what? Let's just call it a 45 degree 8:02:21angle. And let's say all of a sudden,8:02:24let's make this same color 8:02:27yellow. the 20-day moving average starts 8:02:29to, you know,8:02:31uh it becomes basically steeper, right?8:02:34It starts to kind of curl even higher 8:02:36and and and you know, make it kind of a 8:02:39higher angle. This is 45° maybe at this 8:02:42point. This is more like 60°, right? And 8:02:44we see price start getting really 8:02:48extended from the 20-day moving average 8:02:51to the point where 8:02:54there's even let's say even even higher.8:02:57Right. Right. And you see that there's a 8:03:00ton of distance 8:03:02between price. Right. Let me make this a 8:03:05different color. Let's do make this like 8:03:07orange. Let's say there's a lot of 8:03:09difference between price up here and the 8:03:1220-day moving average down here. You can 8:03:14see this is the price that this is the 8:03:15distance that's representing that. So,8:03:19what do we do up here? Well, we don't 8:03:21want to play long up here, right? Why?8:03:23Because number one, we're extended from 8:03:25the 20-day moving average. Remember, we 8:03:27talked about we want to take entries 8:03:29that's at or near the, you know,8:03:31trending 20-day moving average. We're at 8:03:34this point, we're really far from the 8:03:3620, right? The other thing is we had a 8:03:38huge move higher and we don't want to 8:03:42buy at the highs. So what do we do? This 8:03:45is actually the exact point where we're 8:03:47going to be trying to find a short where 8:03:50we have extension in this sort of 8:03:51acceleration. So now that you guys get 8:03:54the general idea of what I'm talking 8:03:55about and how we're finding this 8:03:57reversal setup, let's actually go into 8:04:00the presentation and talk about details 8:04:03and specific things that we're looking 8:04:05for. So this is called the exhaustion 8:04:08play. You could also call it the 8:04:10climactic pattern.8:04:13And this is honestly the most potent 8:04:15reversal setup. This is the only way to 8:04:18pick reversals, right? I think this is 8:04:19there's this amazing idea um where 8:04:23traders, they just want to pick the 8:04:25tops. They want to pick the bottoms in 8:04:27stocks, right? There's just this like 8:04:28idea behind it where it's just like, oh,8:04:30you're buying it at the absolute bottom 8:04:32or you're shorting it at the absolute 8:04:34top. And that ideal idea is so 8:04:36appealing. So if you're one of those 8:04:38traders who is really trying to find 8:04:41reversals and that's just what you're 8:04:43inclined to do, that's just like what 8:04:45makes sense to you, then this strategy 8:04:47is going to really help you with that 8:04:49and help you take, you know, your 8:04:51trading to, you know, your trading to 8:04:54the next level, especially with the 8:04:55strategy. So something to understand,8:04:57guys, I think truthfully this is the 8:04:59most difficult trading pattern. If 8:05:02you're a beginner, I would say stay away 8:05:04from this pattern until you're a little 8:05:06bit more experienced. And the reason 8:05:09it's the most difficult is because your 8:05:11odds of success 8:05:14is always greatly increased when you 8:05:16play with the trend. You usually want to 8:05:20be going with the trend, right? If the 8:05:22charts are saying bullish, if there's an 8:05:25uptrend on several time frames, right?8:05:27and everything is screaming bullish,8:05:30well, you should play long, right? You 8:05:32should go ahead and look for buying 8:05:34opportunities because everything is 8:05:36telling you that there's a lot of buying 8:05:38pressure. So, going short in an 8:05:40environment where there's a lot of 8:05:42buying pressure, that's difficult. And a 8:05:45lot of times, you're going to, you know,8:05:47you're going to take some trades with 8:05:49the with the exhaustion or climactic 8:05:51pattern, and it's not always going to 8:05:52work out. They have a lower likelihood 8:05:55of success, right? especially when you 8:05:58don't know the specific details that you 8:06:00need for the setup. So, it's it's 8:06:02difficult. Just stay away from it as a 8:06:04beginner and start doing it when you're 8:06:06a little bit more experienced, I would 8:06:07say. But it's up to you, obviously. So,8:06:10like I said, you don't want to you 8:06:11typically don't want to play against the 8:06:13overall trend. However, you should still 8:06:15be equipped with the knowledge of how to 8:06:16do it correctly.8:06:18And the thing is, guys, since we're 8:06:19trying to catch tops and bottoms, this 8:06:22setup might take more than one try,8:06:25right? Like if you're finding one of 8:06:27these setups, you might have to enter it 8:06:29more than once because you have a high 8:06:32likelihood of getting stopped out if it 8:06:35continues like in that direction. You 8:06:37know what I mean? And and that'll make 8:06:38sense in a little bit here. So let's 8:06:41talk about the setup. So first 8:06:43requirement is we have you know in this 8:06:45case this is a climactic buy setup,8:06:48right? Or exhaustion buy setup 8:06:51um because we're going to be buying in 8:06:53this situation. So, number one, you need 8:06:55a declining 20-day moving average,8:06:58right? And ideally, it's we talked about 8:07:00slope. Ideally, you know, the the slope 8:07:04is very steep with the 20-day moving 8:07:06average.8:07:07So, declining, it's overpric. Perfect.8:07:10Acceleration. So, let's talk about 8:07:12acceleration. We kind of mentioned 8:07:14acceleration and I kind of showed that 8:07:16idea. Where did it go? Did my I guess my 8:07:19drawings got deleted. No problem. Um, so 8:07:22in terms of acceleration,8:07:25notice here that these red bars 8:07:28are becoming increasingly larger. And 8:07:30for the climactic pattern, for this 8:07:32pattern, you need to have at least five 8:07:36or more red bars in a row. Actually,8:07:38let's start over here before we go on to 8:07:40an acceleration. Um, so yeah, you need 8:07:42ideally five or more red bars in a row 8:07:45and you need five consecutive lower 8:07:47highs, right?8:07:49So 1 2 3 4 five. That's five red bars in 8:07:52a row. Even six actually. And you could 8:07:55see we're making lower highs on each red 8:07:57bar. Those are requirements.8:08:00And we're going to be looking for clear 8:08:02extension and acceleration.8:08:05And the whole idea of the setup is we're 8:08:08trying to buy the stock or crypto when 8:08:10supply is about to run out. Like there's 8:08:12a lot of selling at this point right 8:08:14here. we could be confident that supply 8:08:17is starting to run out and that's when 8:08:19we're going for the long and that's when 8:08:22we're trying to buy it because like 8:08:24there doesn't need to be a lot of demand 8:08:27to bring this stock or crypto up from 8:08:30here because if there's zero supply if 8:08:32there's zero people selling it down here 8:08:35because they already sold then any 8:08:37amount of buying pressure will bring 8:08:39this back up.8:08:41So we talked about acceleration. Notice 8:08:44how these red bars are becoming 8:08:46increasingly larger and larger.8:08:49Notice that the distance between price 8:08:52and the 20-day moving average is 8:08:55becoming increasingly larger. Right?8:08:57Like here there's [snorts] not that much 8:08:58different uh distance. Here there's more 8:09:01distance. Here there's even more 8:09:02distance. And all the way down here 8:09:04there's a lot of distance. That's what I 8:09:06mean by acceleration. The candlesticks 8:09:09are becoming increasingly larger. So, we 8:09:12need to see this acceleration. It cannot 8:09:14just be a steady and gradual decrease.8:09:17Okay, this is a really 8:09:20a [clears throat] lot of people get this 8:09:21wrong where they'll see a very steady 8:09:24and gradual downtrend and they'll try to 8:09:27find a reversal. No, you need to have 8:09:30this acceleration.8:09:32Um, we also talked about, you know,8:09:33extension from the 20. These are kind of 8:09:35connected. the acceleration, the 8:09:37extension as is it as it's accelerating,8:09:40it's going to become more and more 8:09:42extended. And the larger the distance 8:09:45between price and the 20-day moving 8:09:48average, the more oversold the stock or 8:09:51crypto is. So, if there's a lot of 8:09:53distance between price and the 20-day 8:09:55moving average, like in this scenario,8:09:58you could think of it as this is 8:09:59oversold and there's probably going to 8:10:03be a correction higher.8:10:05We also talked about volume already. Um,8:10:08or if we haven't talked about volume 8:10:10yet, it's going to be in the next class.8:10:12And you could think, we also need a 8:10:14large volume spike here. And the volume 8:10:18spike. Um, we talked about amateur and 8:10:21professional volume or igniting volume.8:10:23So, we want to see a ton of amateur 8:10:25volume down here. Okay. And so,8:10:28hopefully those are the three 8:10:29requirements there. We have acceleration 8:10:32that causes, right? the acceleration,8:10:34increasingly larger red bars that causes 8:10:36the extension from price and the 20-day 8:10:39moving average. We have a huge volume 8:10:42spike indicating a reversal. And once we 8:10:45have one of these entry bars that we 8:10:47talked about, we talked about that with 8:10:48the buy setup. Um, once you get one of 8:10:51these entry bars, you place your entry 8:10:54over the entry bar and your stop loss 8:10:57under the lows of the move. So, that's 8:11:00what's key. It has to be under the lows 8:11:01of the move.8:11:03So, let's talk about the importance of 8:11:06entry [clears throat] bars. We already 8:11:06talked about this with the buy setup.8:11:08You guys should already know this. We're 8:11:09looking for narrow range bars or we're 8:11:12looking for dogee bars or for bottoming 8:11:15tails. Cuz remember, if we get a 8:11:17bottoming tail right here, it suggests 8:11:20that what that the buyers have started 8:11:22taking control.8:11:24So, an entry bar, it provides us a clear 8:11:26entry and a clear stop-loss, right?8:11:28Entries above the entry bar, stop loss 8:11:31below it.8:11:33and increases our reward to risk. And uh 8:11:36we're always going to put our stop loss 8:11:38under the very lows of the drop. So 8:11:40whichever wherever the lows is of the 8:11:42drop, that's where we're putting our 8:11:44stop loss. So if it continues lower,8:11:47it'll hit our stop-loss and we'll exit 8:11:50immediately. Let's look at the opposite.8:11:53This is a climactic sell setup or an 8:11:56exhaustion sell setup. Um you could see 8:11:59here we have a rising 20-day moving 8:12:00average. You could see price. Well,8:12:03number one, we need um ideally five or 8:12:05more green bars in a row and [snorts]8:12:08five consecutive higher highs. You can 8:12:10see we have higher highs. Okay, five 8:12:12green bars in a row. We're looking for 8:12:15acceleration. Notice how the green bars 8:12:17are becoming increasingly larger and 8:12:19larger,8:12:21causing extension from the 20-day moving 8:12:23average. You can see the distance here.8:12:25Okay. Obviously, the larger the distance 8:12:28between price and the 20-day moving 8:12:30average, the more overbought it is. So,8:12:34if you see a lot of distance between or 8:12:36you see a lot of extension between price 8:12:38and the 20, you could assume that it's a 8:12:41little bit overbought and a correction 8:12:44might take place. And of course, we have 8:12:46a volume spike at the highs indicating a 8:12:49reversal here. Okay, it's the same exact 8:12:51thing except obviously the opposite. Our 8:12:53entry in this case would be shorting 8:12:55shorting under the entry bar stop losses 8:12:58over the absolute highs of the move.8:13:01Okay.8:13:03So you know whenever you have a huge 8:13:05rally like this nar and you get narrow 8:13:06range bars or topping tails or even 8:13:09bottoming tails dogey bars small bars 8:13:12like this those are entry bars. They 8:13:14enhance the shorting opportunity.8:13:17It gives you a clear entry and stop-loss 8:13:20obviously better reward to risk. and 8:13:22we're always going to put the uh the 8:13:23stop loss over the highs of the of the 8:13:25rally. Okay, hopefully this makes sense 8:13:27for you guys. Now, let's look at some 8:13:29examples and let's let's kind of check 8:13:32off everything we need to know here. So,8:13:34number one,8:13:35number one, uh do we have a rising 8:13:3720-day moving average? Yes. Is the 8:13:4020-day moving average is the slope 8:13:42increasing? Well, you can see it's 8:13:43curling. It's curling. You could see 8:13:45this the slope is slowly increasing to 8:13:47the point where here you could see that 8:13:50you know this is much greater than 45°.8:13:53This move is probably you know based off 8:13:56this moving average the move is probably 8:13:57not sustainable right now looking do we 8:14:01have well acceleration. Okay. Well,8:14:04first we move up, then we kind of base.8:14:06Then we start to grind higher, grind 8:14:08higher until eventually we start to see 8:14:12some clear acceleration, right? The bars 8:14:14are becoming bigger and bigger and 8:14:15bigger. We kind of had two little breaks 8:14:17with these bars, but right after that we 8:14:19get one huge bar, another huge bar. And 8:14:23with this topping tail, this was being 8:14:26bought before. The highs was up here,8:14:28right? So, you could see clear 8:14:30acceleration. The bars are becoming 8:14:32increasingly larger. There's clear 8:14:35acceleration, right? We also have 8:14:37extension. I mean, look at this point,8:14:40we're kind of close to the 20. We're 8:14:41close to the 20. We're close to the 20 8:14:43until boom,8:14:45huge rally. At some point, we were all 8:14:47the way up here. Look at the distance 8:14:49between price and the 20-day moving 8:14:50average. Clear extension.8:14:54And we also at the top right here,8:14:57right? Huge spike in amateur 8:15:01uh buying volume up here. Huge spike in 8:15:03volume suggesting a reversal. Where 8:15:06would our entry be in this case? Under 8:15:09this candlestick that would be entry and 8:15:12then stop loss up here. Okay, we also 8:15:15get a topping tail by the way which 8:15:17shows that the sellers have taken 8:15:18control. Let's look at another example.8:15:21Here we have we started from the 20.8:15:25Huge rally higher,8:15:27right? Um, this might have even gotten 8:15:30halted because we have a gap here. Um,8:15:32oh yeah, by the way, guys, for this 8:15:34setup, the target is always the 20-day 8:15:36moving average. So, this would be the 8:15:39that this is target because the the bars 8:15:42are becoming increasingly larger. This 8:15:44is not a perfect setup, but I I kind of 8:15:46want to show you guys, you know, not the 8:15:48best setup just to show you guys that,8:15:50you know, you don't need a perfect setup 8:15:51like this to play this pattern.8:15:54Entry [clears throat] is right here.8:15:55Stop losses over the highs. Um, we have 8:15:59the extension as well. So, nice.8:16:02Uh, this is a really, really beautiful 8:16:04setup here. So, let's take a look at it.8:16:07You could see move starts from the 8:16:09declining 20-day moving average. You can 8:16:11see the 20-day moving average is 8:16:12curling, starting to curl lower and 8:16:15lower and lower and lower, right? And we 8:16:18drop, we kind of base here, we drop 8:16:21again, little retracement, we start to 8:16:23drop, base, and all of a sudden, you 8:16:25could see the acceleration right here,8:16:28really starting where we really 8:16:30accelerated, right? You could see the 8:16:33bars are becoming larger and larger. We 8:16:35don't get the volume spike. So, in this 8:16:37case, we didn't get the volume spike.8:16:40That doesn't mean that this is not a 8:16:42good pattern just because we don't get 8:16:45the volume spike. Everything else, the 8:16:48acceleration, the extension from the 8:16:5020-day moving average, it was telling us 8:16:52that it was climactic and it was 8:16:54exhausted.8:16:56And the reason it's called exhausted,8:16:57right? The reason I say exhausted is 8:16:59because in this case, the sellers have 8:17:01been exhausted. In this case, the buyers 8:17:04have been exhausted up here. There's no 8:17:05more demand up here causing it the 8:17:07sellers to bring it down.8:17:10here. There's no more supply causing the 8:17:12buyers to bring it all the way back up 8:17:13to the 20-day moving average is target.8:17:16Entry is over the highs. Stop loss under 8:17:18the lows.8:17:21Let's look at another [clears throat]8:17:22example. We have a So guys, what if you 8:17:25guys are looking at this, you should 8:17:26immediately be able to identify the the 8:17:29setup that this is stemming from. This 8:17:32is a breakout, right? We have a rising 8:17:3520-day moving average that's curling 8:17:37under price. We base into the moving 8:17:40average. We start to break out. We start 8:17:43to get the acceleration,8:17:45right? Huge volume spike up here showing 8:17:50amateur buy volume and then professional 8:17:53igniting volume, right? Because we that 8:17:55that's when we started to move lower. We 8:17:58have distance between price or price and 8:18:01the 20-day moving average, right? Uh 8:18:05there's clear acceleration. really nice 8:18:07shorting opportunity. These are uh 8:18:09incorrect. This should say stop-loss.8:18:12This should say entry. Okay.8:18:15And that's our target.8:18:18Same thing here, guys. Clear. We have a 8:18:20base breakdown.8:18:23Curling 20-day moving average pointing 8:18:25lower. Really nice breakdown here. Huge 8:18:29drop, right? We see clear acceleration.8:18:33There's clear extension from the 20 in 8:18:35price. We get a bottoming tail 8:18:37suggesting the buyers have taken 8:18:39control. The 20-day moving average is 8:18:42our first target. Huge volume spikes up 8:18:45here showing a reversal. This is a 8:18:47really really nice setup here and we 8:18:49play it long entry here, stop-loss here.8:18:54Uh let's look at I think you guys have 8:18:55seen this before in our other classes.8:18:58Several setups here. We have a uh 8:19:02breakdown 8:19:04right under this base breakdown with a 1 8:19:072 3 4 pattern. 1 2 3 4 setup. We drop 8:19:12clear acceleration, clear extension,8:19:15huge volume spike indicating a reversal.8:19:19First target is a 20-day moving average.8:19:21And this actually formed a sell setup.8:19:24Okay, this formed a sell setup and then 8:19:26we ended up going lower. Okay, same 8:19:30thing here.8:19:31Um, what happened here [clears throat]8:19:33is um, we have a rising 20-day moving 8:19:35average. We kind of the acceleration 8:19:37wasn't very clear, but it is sort of 8:19:40climactic because the 20-day moving 8:19:41average started, you know, the slope was 8:19:44pretty huge.8:19:46Rallied. We got a double top making a 8:19:48higher low right here. And boom, nice 8:19:52setup here as well.8:19:54Same thing here. We dropped into the 200 8:19:56day moving average in this case on large 8:19:58volume.8:20:00Okay, reversal setup. Boom.8:20:04So guys, let's talk about multiple time 8:20:06frames for the setup. Using multiple 8:20:09time frames is key.8:20:12And why is it key? Well,8:20:14if you don't have a clear entry 8:20:18on the time frame you're looking at, you 8:20:20should shift to a lower time frame. And 8:20:24e you can even go down to the one or two 8:20:26minute charts for a potential entry.8:20:28Okay, so let's kind of talk about this.8:20:31Let's and let's let's go to a an 8:20:33example.8:20:34Uh let's look at uh let's look at this 8:20:37example. You might be saying to 8:20:39yourself, hey, you know, I understand 8:20:41this setup, but one thing I don't 8:20:43understand is 8:20:45we talked about entry bars, right? how 8:20:48we want entry bars. But on a lot of 8:20:49these setups, like for example, this is 8:20:52not a great entry bar. This is a huge 8:20:55topping tail, right? If our entry is 8:20:57over here and our stop loss is over all 8:21:00the way up here, that's a huge stop 8:21:03size. And you might be thinking, there's 8:21:05no entry bar here. Like there's a 8:21:06topping tail, but this is not a small 8:21:08bar like this. So in those scenarios,8:21:11let's say we're looking at the 15-minute 8:21:13chart here, right? This is the 15-inute 8:21:15chart. If you see something like this on 8:21:17the 15-minute chart and you're 8:21:19[clears throat] saying to yourself, I I 8:21:20I want to play this, but I need a better 8:21:22entry bar, what you would do is you 8:21:24would drop to the five minute time frame 8:21:27or the one minute time frame or the 8:21:29twominut time frame and see if you can 8:21:31spot a potential entry bar and then, you 8:21:35know, play the setup off the lower time 8:21:38frames wherever you could find an entry 8:21:41bar. However, always place your stop 8:21:43loss over the absolute highs or uh 8:21:47absolute lows of the move. Hopefully 8:21:50that makes sense though, right? So,8:21:51let's take a look at this example. You 8:21:53could see we don't have an entry bar,8:21:56right? Our entries here, stop losses 8:21:57here, but in this case, go to a smaller 8:22:00time frame and see if you could spot an 8:22:03entry bar off the lower time frame.8:22:06Okay?8:22:08And if you can't, then you're just gonna 8:22:11and you really still like the setup 8:22:12despite it having not having an entry 8:22:14bar, then you're going to have to just 8:22:17have a larger stop-loss than you want 8:22:19to. Um, you could even just sometimes 8:22:22when they move really fast and I can't 8:22:26find an entry bar, I'll I'll just short 8:22:28it right here, right? And I'll just 8:22:31place my stop loss above the highs,8:22:33right? Like you could even do that. And 8:22:35it's technically not a textbook, but 8:22:37let's say it's over you're over here.8:22:39You could just and you think it's this 8:22:40is the reversal is coming. Just buy it.8:22:44Calculate your risk. Make sure you're 8:22:45not risking too much. Buy it wherever 8:22:47and just place your stop loss underneath 8:22:49the lows. And if it hits the lows, it 8:22:51continues lower. Well, you're going to 8:22:52be already out of the position.8:22:55Okay? So, you could do that as well.8:22:57Same thing here. We have a large large 8:22:59entry bar. go to the smaller time frames 8:23:01and try to find a better entry bar, a 8:23:04better uh you know entry [snorts] into 8:23:06the trade.8:23:08Okay, so hopefully that makes sense. And 8:23:10looking at the climactic and exhaust 8:23:12exhaustion pattern, um something to note 8:23:15here, if the daily chart and the 8:23:18intraday charts are both climactic,8:23:21meaning let's say on the daily chart,8:23:24you also see that there's clear 8:23:26extension, there's clear acceleration,8:23:28right? And on the on the uh lower time 8:23:31frames, right? Like for example, on the 8:23:3415-minute chart or on the hourly chart,8:23:36you're also seeing that it's uh that 8:23:39there was acceleration, we [snorts] have 8:23:41extension, right? And if both the daily 8:23:44and the intraday time frames are both 8:23:47exhausted and climactic,8:23:49that makes a much more potent setup,8:23:53right? Because all of the time frames 8:23:55are climactic. all of them are exhausted 8:23:58and that setup has a much higher 8:24:01likelihood of working out. Okay,8:24:03hopefully that makes sense. Hopefully 8:24:05you guys understand what what I mean 8:24:07about the multiple time frames. Um I'm 8:24:11trying to think if there's anything else 8:24:12I want to mention with this setup. So 8:24:15yeah, guys, this is a difficult setup,8:24:16but it's really not that hard if you 8:24:18think about it. There's not that many,8:24:21you know, requirements we need. We need 8:24:23acceleration. That's pretty easy.8:24:26Extension, pretty easy as well. Just 8:24:29distance. Um and yeah, and just make 8:24:31sure you're following all of these 8:24:32qualities. Make sure you're looking at 8:24:34several time frames. Um don't make the 8:24:37mistake of just finding um a gradual 8:24:41uptrend and just shorting that. That's 8:24:43not correct. You need that extension.8:24:45You need that acceleration. You need,8:24:48you know, hope ideally you also need the 8:24:49volume spike as well. This could work on 8:24:52the smaller time frames for scalps as 8:24:54well for one or two minute time frames 8:24:55if you're scalping or five minute. So 8:24:58this works for scalping, swing trading,8:25:00whatever it doesn't matter. I will say 8:25:02one thing guys um before I forget and 8:25:07there was this example. Um so I see this 8:25:12mistake a lot. Let's say you have a 8:25:15climactic move that we have that 8:25:17acceleration, we have that extension,8:25:20right? Usually the first sell setups 8:25:25after that move, right, we drop.8:25:26Remember a sell setup is when we retrace 8:25:28back to the 20-day moving average,8:25:31right? And then we short it again.8:25:33Usually, whenever you have a sell setup 8:25:36after a huge drop like this,8:25:40they usually never work.8:25:43Okay. So, let me kind of paint that out 8:25:45on on here real quick.8:25:48Let's say we have a huge drop, climactic 8:25:51drop, and then we retrace 8:25:54this shorting this position right here,8:26:00right?8:26:02Doesn't work. Don't do this. It works 8:26:06right here, but this is an anomaly. It 8:26:08usually never works. Okay? So if we have 8:26:11that climactic drop, right, we have that 8:26:14acceleration, that extension, the volume 8:26:17spike that we talked about, it's a clear 8:26:19climactic pattern, and you buy it, let's 8:26:21say down here, right?8:26:26Right. Remember, our first target is the 8:26:2820-day moving average. So, let's change 8:26:30this color. Let's make this white. Let's 8:26:32say, you know, it got to the 20-day 8:26:34moving average. Uh, I know it's kind of 8:26:36sloppy, but that's the 20, right? and 8:26:38you you took profits off this long. You 8:26:41bought it here and you took profits 8:26:42there, don't short it, right? Because 8:26:46this rarely ends up continuing lower. It 8:26:49this usually fails. And let me show you 8:26:52what what that looks like going long.8:26:55Let's say you have a climactic 8:26:59long, right? Where huge increase some,8:27:03you know, we have literally picture 8:27:05this. Picture this, right? We have that 8:27:09here, okay?8:27:12And you decide to short it up here,8:27:15right? You you're shorting it up here 8:27:18and it drops in your favor, right? And 8:27:22remember the target is what? The 20-day 8:27:24the target is the 20-day moving average.8:27:27So, let's say that's white.8:27:29And you go and you you know, remember 8:27:31that that's where our target is too, the 8:27:3320-day moving average. You took profits 8:27:36right there.8:27:39This is technically a buy setup, right?8:27:40Because we're retracing to the rising 8:27:4220-day moving average.8:27:44This doesn't work. This buy setup after 8:27:47a climactic move does not work. Right?8:27:50You could see it here. We had a 8:27:51climactic move higher. We dropped. We 8:27:54retraced right technically to the 20-day 8:27:56moving average. The first buy setup 8:27:59after a climactic rally usually doesn't 8:28:01work. You can see tried to move up and 8:28:04it failed. Okay. Um let's see if we 8:28:07could find another. So this is an 8:28:09anomaly it working here. Let me see if I 8:28:11could find another example like here,8:28:14right? We have a this is technically a 8:28:16sell setup, right? We buy it down here,8:28:19right? Climactic retrace to the 20-day 8:28:21moving average. This is a sell setup.8:28:23You could see the sell setup did not 8:28:25work. We ended up continuing higher.8:28:28Same thing right here. A lot of people 8:28:30are going to go ahead and buy this and 8:28:32be like, "Okay, we have a rally. We have 8:28:34a pullback into the rising 20. This is a 8:28:37buy setup." But remember, buy setups 8:28:39after climactic moves like this where we 8:28:42have that extension, they never work.8:28:45And this never and this ended up 8:28:46failing. Okay. Same thing here.8:28:49Technically over right here is a buy 8:28:51setup. These don't work. Don't. So in 8:28:55summary, after a [snorts] climactic 8:28:57rally where after, you know, exhaustion 8:29:00or climactic rally or a climactic or 8:29:03exhausted drop and we get that 8:29:05retracement to the 20-day moving average 8:29:07here or the 20-day moving average here,8:29:11this sell setup doesn't work and this 8:29:14buy setup never works. So never take buy 8:29:17or sell setups after exhausted uh or 8:29:20climactic patterns. Okay, that's 8:29:23basically the last point I wanted to 8:29:24make. Now, you guys should be able to 8:29:26also play reversal patterns and 8:29:28understand what to look for 8:29:29specifically. Remember, multiple time 8:29:32frames is key. And that's basically all 8:29:35I wanted to talk about, guys. So,8:29:36thanks. See you in the next class.8:29:40This next chapter is all about risk 8:29:43management. And risk management is by 8:29:45far the most important skill set that 8:29:47you can have as a trader. So, make sure 8:29:50you're paying attention because it 8:29:51doesn't matter how much money you make.8:29:54If you don't learn how to protect your 8:29:56capital and how to limit your losses,8:29:58you'll never become a profitable trader.8:30:00So, in this chapter, I'm going to teach 8:30:02you how to adopt a riskmanager mindset.8:30:06So, let's hop right into it. What is 8:30:08going on, guys? Hope you're having a 8:30:10great day. Today we are going to start 8:30:13with the riskmanagement section of the 8:30:16course and this is going to be a very 8:30:18exciting lesson and let's just hop right 8:30:22into it. Okay, so risk management. This 8:30:26is truly a key to your trading success.8:30:29There isn't a single successful trader 8:30:32out there that doesn't know how to 8:30:35manage their his his or her risk. Okay,8:30:38I don't care if you're able to find the 8:30:40best trading setups, you're able to find 8:30:43the best breakouts, the best buy setups,8:30:45right? You're able to read charts 8:30:47perfectly. The fact is, if you can't 8:30:51manage your risk, you're [snorts] never 8:30:54going to succeed. Okay? So, make sure 8:30:57you really pay attention to this. So,8:30:59why does it matter? Like I just 8:31:01mentioned, it doesn't matter even how 8:31:04much money you make, right? It doesn't 8:31:06matter how many winning trades you have.8:31:09If you can't manage your risk and limit 8:31:12your losses, you're never going to 8:31:14succeed. Okay? And let me kind of give 8:31:16you guys a story of uh my personal 8:31:19trading journey. I [snorts] remember 8:31:21when I first started trading, um my 8:31:24father, of course, he's a professional 8:31:26trader, so he was the one that was 8:31:27mentoring me in the beginning. And he 8:31:29told me, "Your first goal in trading 8:31:33shouldn't be to make money, right?" And 8:31:35that sounds kind of crazy, like we're 8:31:36we're, you know, that's why we're doing 8:31:38this. We're here to make money. But he 8:31:40said, "No, your first goal should be to 8:31:43break even consistently."8:31:46Because by breaking even consistently,8:31:49what does that mean? That means you're 8:31:51not losing money consistently, right?8:31:54And once you're able to 8:31:57limit your losses and be able to not 8:32:02lose money every single day, you're 8:32:05already 80% there to actually making 8:32:08money. Okay, so the goal here, your your 8:32:11first priority as a trader is how can I 8:32:13manage my risk? How can I limit my 8:32:16losses? The wins and the profits will 8:32:18come, but make sure at first you you you 8:32:22know really take care of your risk.8:32:24That's what you want to focus on. The 8:32:26last thing that you want to do as a 8:32:28beginner trader is start trading in the 8:32:31markets and because of your inability 8:32:34to [snorts] manage your risk, you end up 8:32:36blowing up your entire account before 8:32:39you're, you know, before you even gain 8:32:42any sort of experience, right? [snorts]8:32:45So, your win rate does not have to be 8:32:48very high to make money. A lot of people 8:32:51talk about, "Oh, I have such a high win 8:32:53rate. Oh, you know, I win 80% of my 8:32:55trades." That's great. You could have a 8:32:57high win rate and lose money, believe it 8:33:00or not. And you really don't need a high 8:33:03win rate to make money, okay? And we're 8:33:05going to talk about that later. Your 8:33:07first thought when you enter a trade,8:33:11and this is what your thought process 8:33:12has to be. Your first thought should not 8:33:16be how much money can I make off this 8:33:18trade? How much can I profit? How 8:33:20lucrative can this be? No, that's not 8:33:22the mindset that you want to have. The 8:33:26mindset you want to have is how much can 8:33:28I lose if this trade 8:33:32does not work out, right? if this trade 8:33:35hits my stop-loss,8:33:37how much am I going to lose? Right? And 8:33:39if you enter every trade with that 8:33:41mindset with how much am I actually 8:33:44going to lose if it doesn't work out,8:33:46you're going to immediately start 8:33:47limiting your losses. And a lot of risk 8:33:49management, it's not really something 8:33:52you can physically do. It's not about 8:33:53physically finding setups or looking at 8:33:55the quality of certain trading setups.8:33:58No, it's literally it's more about 8:34:00discipline. It's more it's more about 8:34:01the mindset that you have.8:34:04And you're going to notice that the road 8:34:06to profit profitability, right? You 8:34:09don't need to make more money to become 8:34:11more profitable. That's one way to 8:34:13become more profitable is to make more 8:34:15money. But you can also be more 8:34:17profitable by limiting your losses. So 8:34:21just like you should be focusing on you 8:34:23know making money on your trades, you 8:34:26should devote equal 8:34:29um you know mind space towards 8:34:33you know figuring out how do I limit my 8:34:35losses on all these trades. Okay. So 8:34:38number one the first step that you have 8:34:40to do first step is determine your risk.8:34:44sit down on your bed or wherever you 8:34:48want and think about what is the maximum 8:34:52amount of money I am willing to lose per 8:34:55trade. Okay? And what I mean by maximum 8:34:58amount of money you're willing to lose 8:35:00per trade specifically how much money 8:35:02can you lose without being 8:35:04psychologically or emotionally affected.8:35:07Right? Like for example, for me, I 8:35:11usually risk anywhere between $100 and 8:35:13$300 per trade, maybe a little more 8:35:15sometimes, right? If I lose $100,8:35:19I'm not worrying about the next trade,8:35:21right? That doesn't hurt me 8:35:22psychologically. I accepted that I'm 8:35:25okay with losing $100. And when, let's 8:35:28say, that loss occurs when I do lose the 8:35:30hundred, it doesn't affect me, right? It 8:35:32doesn't affect my psychology or my 8:35:35disposition. it doesn't make me uh make 8:35:38emotional decisions. But let's say for 8:35:41example, if I lost $1,000, well, that's 8:35:44going to make me feel uncomfortable,8:35:45right? That's going to make me feel a 8:35:47little emotional because I'm not really 8:35:49prepared emotionally and psychologically 8:35:52to lose that much money, right? And that 8:35:55sort of loss is going to affect my 8:35:59trading. It's going to affect my 8:36:00psychology. And maybe, you know, you 8:36:04guys have taken a few trades. And if 8:36:05you've noticed after some of your 8:36:07losses, you begin to, you know, think,8:36:11you know, you're not thinking rationally 8:36:12anymore. Now you're starting to think 8:36:14emotionally. You're starting to think,8:36:15oh, I have to make back that money that 8:36:17I lost. I can't believe I lost that 8:36:18much. Oh, and you start, you know,8:36:20making bad decisions. That's not what 8:36:23you want to do. You want to risk the 8:36:25exact amount that you're comfortable 8:36:27with risking where if you lose that 8:36:29amount, it's no big deal, right? If you 8:36:31lo like for me, if I lose 100 bucks,8:36:34it's fine. I'm not worried about it. Big 8:36:36deal. It's okay. But if you're a 8:36:38beginner, right, and you know, you don't 8:36:40know what risk you should go with, start 8:36:41with 10 or $20. I don't even care if you 8:36:44have thousands of dollars to trade with.8:36:47You might have a $25,000 account and 8:36:50I'll still recommend you to start with 8:36:53$10 to $20 risk or maybe even less.8:36:56Start with $5, right? Because in the 8:36:58beginning, right, your goal isn't to 8:37:02make money. It's to develop consistency 8:37:05and perfect your trading plan. And the 8:37:07money will come afterwards. Okay? So,8:37:10stop worrying about the money. I can 8:37:11tell you right now, if you're just 8:37:13starting to trade and you're taking this 8:37:15seriously, if your goal is to make money 8:37:17right away on the first couple trading 8:37:19days, it's not going to happen. Focus on 8:37:23the consistency and perfecting your 8:37:26plan, right? and practice. Don't worry 8:37:28about the money. And in general, if 8:37:30you're a beginner, you guys should be 8:37:32paper trading anyway. But this class is 8:37:34more about, you know, once you're done 8:37:36paper trading and you're going into 8:37:38trading real money, okay? Because with 8:37:40real money comes real emotions comes 8:37:44real psych real, you know, human 8:37:46psychology, right? And your risk should 8:37:50be the absolute highest amount you're 8:37:52willing to lose per trade. If your risk 8:37:53is $100 per trade, the maximum amount 8:37:56you could lose is $100. Okay? So, let's 8:38:00say you've determined your risk. Let's 8:38:01say for for our sake, it's $20. Okay?8:38:04That's that's our risk. Actually, no,8:38:07let's not do $20. Let's do $100. Our 8:38:10risk is $100 because that's what we're 8:38:12using in this example. Your strategy 8:38:14should be this on every single trade 8:38:17that you take, right? If you're risking 8:38:21$100,8:38:23you have to make sure or you have to 8:38:26pick trades that give you the 8:38:29opportunity to make at least 8:38:32$200 or more, right? So, if our risk 8:38:35unit, our our R is $100,8:38:39your return to risk has to be two to 8:38:43one. Two Rs to one R, right? Two Rs is 8:38:46is $200.8:38:48one R is $100. Right? So, number one,8:38:51step one, figure out your entry price.8:38:53Right? Whether it's a base breakout, a 8:38:56buy setup, a breakdown,8:38:58um a climactic pattern or exhaustion 8:39:01play, or a sell setup, or a one, two,8:39:03three. You guys should know how to find 8:39:05your entries for each one of those 8:39:07setups by now. Find your entry price.8:39:09Number two, find your stop-loss price,8:39:12right? You guys should be able to uh be 8:39:13able to know how to do that as well by 8:39:15now. And step three, figure out your 8:39:17target price. And uh we're going to have 8:39:20classes in the course talking about 8:39:22figuring out your target price. And it's 8:39:24usually comes down to checking your next 8:39:26resistance or support levels. Okay. And 8:39:30step four, ask yourself based on my 8:39:33entry and and the size of my stop-loss 8:39:36and the next target, right? Your your 8:39:38target price, is there 2 to one return 8:39:41on risk? Right? Do I have the potential 8:39:44to make at least 8:39:46twice the amount that I am risking?8:39:49Okay. And if yes, then go ahead and take 8:39:52the trade. And if it's a no, then pass 8:39:55on the trade. Right? If this only h if 8:39:57you're if you find a trade and you're 8:39:59seeing that it only really has the 8:40:00potential to make you $100, well, why 8:40:03would you risk $100 to make $100? That 8:40:06doesn't make sense. We want to risk $100 8:40:09to make $200 or $300 or $400. And over 8:40:13time, if you keep taking setups 8:40:17that give you at least 2 to one 8:40:20risk-to-reward, you're going to notice 8:40:22that you don't need a high win rate to 8:40:25make money. So, let's say we take 10 8:40:28trades and only four of these trades are 8:40:32winning trades, right? If you're 8:40:35following this risk management strategy 8:40:37where you're making at least 2 to one 8:40:39return on risk, right? If you're 8:40:41winning, if your winning trades make 2x 8:40:44what you're risking, you're going to 8:40:46make money. Okay? So, we have our first 8:40:49six trades. Let's say all they're all 8:40:52losing trades, right? And we know that 8:40:54our risk is $100. So, we lose the 8:40:57maximum amount that we can per trade,8:40:59which is $100. So we lose 100 100 100 8:41:03100 100 100 100 100 100 100 100 100 100 8:41:04100 100 100 100 100 100 100 100 100 100 8:41:04100 right we're down 600 but then we 8:41:06have four winning trades that make us at 8:41:08least 2:1 return on risk so we make 200 8:41:12on four what's our profit well it's 8:41:14going to be 800 8:41:16minus 600 we have a profit of $200 right 8:41:22so even with a 40% win rate as long as 8:41:25you're following this strategy you're 8:41:28going to make money okay And imagine 8:41:31some of these winners, right? Like we 8:41:34talked about 2:1 uh return on risk. What 8:41:37if some of your some of your winners are 8:41:38actually, you know, huge winners, right?8:41:40Let's say you you make 3 to one. Let's 8:41:42say this is a $300 trade. This is a $300 8:41:45trade, right? Then that's when you see 8:41:47your profits go up, up, and up. But the 8:41:51point here, guys, is as long as you're 8:41:54making 2x on your winning trades and you 8:41:57then on your losing trades, right? then 8:42:00you're going to make money even if you 8:42:01don't have a high win rate even if 8:42:03you're not winning 60% of your trades.8:42:05Okay, hopefully that makes sense. So 8:42:07keys to understanding risk management,8:42:10it's important to understand how to 8:42:11share size. Your share size depends on 8:42:15the size of your stop-loss. You guys 8:42:17should already have some um experience,8:42:20you know, looking at and understanding 8:42:22share size through our through our 8:42:24strategy videos, right? But to remind 8:42:27you guys, share size equals your risk,8:42:31right? Your dollar amount risk divided 8:42:34by the size of your stops loss. Okay, so 8:42:39let's give an example. Let's say your 8:42:40risk is $100. Your entry price is $6.8:42:44Your stop loss price is at $590. Let's 8:42:46say this is a breakout, right? It's a 8:42:4810-centent stop. Your stop size equals 6 8:42:51minus 590. That means the size of your 8:42:54stop is 10 cents. Let's say your target 8:42:56price is $640, right? How many shares 8:42:59should you buy to ensure you don't lose 8:43:02more than $100.8:43:04How many shares should you buy? Well, if 8:43:06you're risking 10 cents, right? You 8:43:08don't want to lose more than 100. Well,8:43:10that's 100 divided by 10 cents. You're 8:43:14going to be buying a,000 shares. That's 8:43:16how many share shares you can buy. At 8:43:19the end of the day, if you oversize your 8:43:22position and you buy or you short more 8:43:25shares than you want to, if that 8:43:27position becomes a loser, you're going 8:43:29to end up losing way more than you want 8:43:31to. That's why share sizing is so so 8:43:34important to risk manage management. So,8:43:36make sure before every trade you take,8:43:39calculate the the the correct amount of 8:43:41shares. Okay? Make sure you calculate 8:43:44the correct amount of shares so you 8:43:46don't end up losing more than you want 8:43:47to. one simple mistake and you know and 8:43:51you know you buying more shares more 8:43:53shares than you wanting to you're going 8:43:56to end up losing way more money than you 8:43:57want to and then that's going to affect 8:43:59your trading psychology.8:44:01We also have the percentage approach 8:44:03where let's say you have a $1,000 8:44:04portfolio and you decide to risk 5% of 8:44:07your account per trade, right? So 5% of 8:44:10your account per trade. That's just an 8:44:12example. Usually, maybe it should even 8:44:14be 2 to 3%. But let's say you decide to 8:44:16risk 5% just to make it easier for us.8:44:19How many shares should you get per 8:44:21position? Well, $1,000 portfolio, you're 8:44:23risking 5% of it. Let's find the dollar 8:44:25amount. $1,000* 5%. 05 equals $50. So 8:44:30$50 is the amount that you're willing to 8:44:33risk, right? That's 5% of $1,000, right?8:44:37Then your share sizing is going to be 8:44:38your risk $50 divided by the size of our 8:44:41stop. Let's say for this example, the 8:44:43size of our stop is five cents. $50 8:44:47divided by five cents, you're gonna end 8:44:49up getting a thousand shares. And if 8:44:51you're uh curious where, oh, well, how 8:44:54do we know the size of our stop? Well,8:44:56you know, that's why, you know, when 8:44:58you're picking your uh trading setups,8:45:01whether it's a buy setup or or a sell 8:45:03setup or a breakout, you're going to 8:45:05know the exact entry, the exact 8:45:06stop-loss. And then, you know, stop size 8:45:10equals entry 8:45:12uh price minus stop-loss price. Okay?8:45:15Golden rule. Here's a golden rule. When 8:45:19you are in doubt,8:45:22lower your risk. If you're in doubt,8:45:25lower your risk. If you're not feeling 8:45:27comfortable, lower your risk. Okay?8:45:31It, you know, it never hurts to lower 8:45:33your risk. If something is going on, if 8:45:35you're not feeling yourself, if you're 8:45:37kind of com, you know, compromised 8:45:38psychologically, just lower your risk.8:45:41Okay? That's a golden rule, okay? If 8:45:44things aren't going well, lower your 8:45:46risk. You guys get the idea. Whenever 8:45:47there's anything that's going bad in 8:45:49trading, the last thing you want to do 8:45:52is, you know, have a huge loss. So,8:45:55lower your risk. That's what I 8:45:56personally do. Sometimes when I have a 8:45:58few losing trades in a row, what do I 8:46:01do? I lower my I lower my risk. Uh keys 8:46:05to sus to success here.8:46:08You, as you guys know, the tighter the 8:46:10stop-loss, the better reward to risk. So 8:46:13that's why you want to find trades that 8:46:14have tight patterns, that have tight 8:46:16stop- losses. At the end of the day,8:46:19guys, risk management is all about 8:46:20discipline. Everything that I taught you 8:46:22today, this is not this isn't anything 8:46:24that difficult. It's nothing that you 8:46:26have to, you know, aside from maybe that 8:46:28formula. Um, but none of this stuff is 8:46:31difficult. This is all just discipline.8:46:32making sure that you're disciplined with 8:46:35your stops, you're disciplined with your 8:46:37risk, and just keep, you know, just 8:46:40always keep in mind that, you know, you 8:46:41don't want to take on bad losers, okay?8:46:44So, be disciplined when it comes to your 8:46:46risk. Make sure you're never oversizing 8:46:48your positions. And by limiting your 8:46:50losses through risk management, you will 8:46:52become more profitable. We talked about 8:46:54that. And guys, just understand now that 8:46:56you guys are traders, you're also risk 8:46:58managers. you are managing 8:47:01the risk of your personal account. Okay?8:47:05And we talked about the psychological 8:47:07aspect of it, but if you're not 8:47:08comfortable with losing x amount per 8:47:10trade,8:47:12what's the golden rule? Lower your risk.8:47:14If you're feeling sad or uncomfortable 8:47:16after taking a trade, golden rule, lower 8:47:18your risk. Losses can um emotionally and 8:47:22psychologically affect you. Don't let 8:47:25your need to make money affect the 8:47:28amount you risk. I understand you want 8:47:30to you want to make money. We all want 8:47:32to make money. We all want to profit.8:47:34But don't let that need to win and that 8:47:38need to be profitable end up being your 8:47:41downfall cuz that might happen. Okay?8:47:44And you're going to become profitable 8:47:46and more you're going to make more and 8:47:48more money over time. Okay? Understand 8:47:50this might take time. Okay? But that 8:47:53shouldn't discourage you. Anything in 8:47:55life that's, you know, makes money or 8:47:58that's worth anything, you know, it 8:48:01usually takes time for to acquire those 8:48:03skills or to acquire that 8:48:04accomplishment. So, understand that this 8:48:05is all going to take time. It's not a 8:48:08problem. You will become profitable over 8:48:10time as long as you manage your risk and 8:48:13you don't blow your account on some 8:48:15stupid trade because you completely 8:48:17oversized your position. Okay? and 8:48:20understand that your as a trader, you 8:48:23know, as a trader, your psychology and 8:48:26your confidence is everything.8:48:30Taking bad losses for no reasons will 8:48:32affect you. I can tell you that 8:48:34personally. It will affect your 8:48:36confidence. And without your confidence,8:48:38without without that psychological comp 8:48:40uh composure, you're not going to be 8:48:43able to take advantage of really good 8:48:44trades. Okay? So please guys, manage 8:48:47your risk. Be disciplined with it.8:48:49Don't, you know, try to go for huge 8:48:52winners. Always think about how much 8:48:54money can I lose if if this doesn't work 8:48:56out. Okay? And that's really it for risk 8:48:58management. I might include another 8:49:00little motivational risk management 8:49:02clip, but that should make sense, guys.8:49:05Let me know if you have any questions.8:49:06Thanks a lot.8:49:08Hey guys, how's it going? Thanks for 8:49:11tuning into this video. The whole topic 8:49:14of this video is going to be share 8:49:15sizing. How many shares should you be 8:49:18purchasing per trade? And before I go 8:49:23into it, this concept is very important.8:49:26It is a critical part of managing your 8:49:29risk. If you guys end up buying too many 8:49:32shares on a trade, you're going to end 8:49:34up losing, you know, way more money than 8:49:38you intended to if the trade goes south.8:49:41Of course, on the flip side, you're 8:49:43probably going to make way more than you 8:49:44intended to if the trade, you know, ends 8:49:46up working out. However, share sizing,8:49:49it's it's important because you need to 8:49:51minimize your risk and you need to buy 8:49:54or short the amount of shares that 8:49:56you're comfortable with because trading 8:49:58is not really about how much money can 8:50:01you make. Of course, you know, we're all 8:50:03in the game to make money, but a 8:50:05critical question really is how much 8:50:07money are you willing to lose? Okay,8:50:10managing your risk is probably one of 8:50:12the most, if not the most important, you 8:50:15know, uh, elements of trading. Okay, and 8:50:18share sizing is a, you know, huge factor 8:50:22in that. So, let's get right into it.8:50:25Step one, and before I actually go into 8:50:27the steps, it's extremely simple. This 8:50:30is something if you guys know basic 8:50:31math, which all of you do, this is 8:50:33extremely simple. All right, step one,8:50:36you're going to want to ask yourself,8:50:37what is the maximum amount, you know,8:50:40dollar amount I am willing to lose on 8:50:42this trade? So, um, if you're 8:50:45comfortable with losing $100 per trade,8:50:48then that's your answer. It's whatever 8:50:49you're comfortable with. Personally, I 8:50:51do anywhere from 100 to 300. Uh, you 8:50:55know, sometimes I risk a little bit more 8:50:57depending on how I'm feeling or 8:50:58depending where my confidence is at, but 8:51:01that is what I'm comfortable with. that 8:51:03is known as your risk for the trade.8:51:06Okay? So ask yourself, what am I 8:51:08comfortable with losing? And figure that 8:51:10number out. And the whole idea behind 8:51:12this is that if you lose more than 8:51:15you're comfortable with losing, then 8:51:17that's going to affect you 8:51:18psychologically. It's going to, you 8:51:20know, hurt your psyche in a way. You 8:51:23know, it's going to make you feel 8:51:24uncomfortable. It's going to be like,8:51:25"Wow, I lost way more than I wanted to."8:51:27It's going to hurt your confidence. You 8:51:28don't want that to happen. When you have 8:51:30a losing trade, it shouldn't affect you,8:51:33you know, and the key to that is you 8:51:35have to make sure you're losing the 8:51:36amount that you're willing to lose or 8:51:38that you can with lose that you're 8:51:40comfortable with losing. Step two,8:51:42calculate the size of your stop-loss for 8:51:44the trade. Some examples is a 10-cent 8:51:47stop or a dollar stop, etc. And in order 8:51:49to correctly identify the stop-loss for 8:51:51the trade, you have to make sure you 8:51:54know exactly what strategy you're 8:51:55playing. Different strategies call for 8:51:58different stop-losses 8:52:00or different stop-loss placement, I 8:52:01should say. So, I would uh definitely 8:52:04look into the buy setup, which is a 8:52:06video that that's posted in the server.8:52:08The breakout, another video posted in 8:52:10the server. And the one 123 pattern, I 8:52:11don't think I posted that yet. However,8:52:14um I'm going to do a class on that 8:52:15shortly. Okay? And make sure you know 8:52:18what strategy you're playing because if 8:52:20you know what strategy you're playing,8:52:21you know exactly where to put your 8:52:23stop-loss. So, that won't be an issue.8:52:25And step three, you're going to apply 8:52:27the formula. What is the formula I'm 8:52:29talking about? It's really simple. It's 8:52:32share size equals your risk divided by 8:52:35your stop-loss. Okay? So, whenever you 8:52:38are going into a trade, I don't care if 8:52:41it's equities or crypto or forex, and 8:52:44you're buying shares or you're buying 8:52:46cryptos, you're you have to ask 8:52:48yourself, what's my share size going to 8:52:51be? Okay? And it's really simple. Let's 8:52:55say your risk is $200. That's the most 8:52:59you're willing to lose on this trade.8:53:01And your stop loss happens to be, you 8:53:03calculate it, it's 10. Then you do $200 8:53:06divided by 10 cents equals 2,000 shares.8:53:09So there you go. You know exactly how 8:53:12many shares to buy. And if you buy,8:53:14let's say, those 2,000 shares and the 8:53:17stock does hit your stop-loss, meaning 8:53:20you know it doesn't work and the trade 8:53:21doesn't work in your favor and it drops 8:53:23by 10, the most you're going to lose is 8:53:25$200, which is the number you agreed,8:53:30you can kind you kind of made an 8:53:31agreement with yourself that that's the 8:53:32most you're willing to lose. Okay, you 8:53:34lost it, but at least you're comfortable 8:53:36with losing that amount. Same thing 8:53:38here. Your risk is $100. Your stop loss 8:53:40is $1. Risk divided by stop-loss 8:53:44$100 divided by $1 is 100 shares. So if 8:53:46you buy it, right, 100 shares, if it 8:53:49drops $1, you're going to lose $100. Or 8:53:52yeah, if you and it drops $1, you're 8:53:54going to lose $100.8:53:56Okay, it's super simple, guys. Again,8:53:59share size equals risk divided by 8:54:01stop-loss. And I'm to the point, you 8:54:03know, where this is kind of automatic in 8:54:05my head. If I'm this is I'm 8:54:07automatically doing the math every time 8:54:09I'm looking or uh you know considering a 8:54:11trade. I am just immediately uh doing 8:54:14this calculation in my head to really 8:54:16figure out what my stop loss or [snorts]8:54:20not what my stop loss what my uh what my 8:54:22share sizing is going to be because 8:54:24again I I personally don't want to lose 8:54:27more money than I'm willing to on that 8:54:30trade. That's why share sizing is 8:54:32extremely important. It's a critical 8:54:34part of risk management. And guys, never 8:54:37buy or short more shares than you than 8:54:41you're comfortable with doing because 8:54:43trust me, if it doesn't work out and the 8:54:46trade goes south, it will 8:54:47psychologically affect you, okay? Well,8:54:50not only that, it might just drain your 8:54:52account. You might lose way more than 8:54:54you intended to. But anyway, guys, let 8:54:56me know if you have any questions about 8:54:57this concept. It's super simple, but and 8:55:00the formula is super simple, but it's 8:55:02extremely extremely important. Please 8:55:05direct message me in manual trades or 8:55:07type in the premium chat tagging my name 8:55:09if you have any questions regarding 8:55:11share sizing. Thanks guys and have a 8:55:13good day videos. So, when my father 8:55:15began mentoring me 5 years ago on how to 8:55:18trade, this was quite literally the 8:55:20first thing that he taught me. He told 8:55:22me that this should be the backbone 8:55:25behind my trading. And that's exactly 8:55:27what it is today. And this is the reason 8:55:29I'm a successful trader today. And this 8:55:31is more than just a rule. This is a 8:55:34mindset. And a lot of you guys watching 8:55:36this video may listen to this video and 8:55:39kind of blow past it. Kind of, oh,8:55:40whatever. Yeah, I know that. But you 8:55:43need to take this to heart. You need to 8:55:45instill this way of thinking into your 8:55:49trading and into your analysis. And I 8:55:51guarantee you, it's going to end up 8:55:54making you more money. And this rule is 8:55:57incredibly simple. When in doubt, lower 8:56:01your risk. Right? It's not sexy. It's 8:56:03not this crazy new indicator. But 8:56:05whenever you are feeling uncertainty,8:56:07stress, high emotions, lack of 8:56:10confidence, whenever you're feeling 8:56:12anything that is negative in your 8:56:14trading, you need to lower your risk.8:56:17When in doubt, just lower your risk.8:56:20Because 80% of your trading success 8:56:23isn't going to come from price action or 8:56:26knowing the right indicators or knowing 8:56:28how to read patterns. It's going to come 8:56:30from your ability to handle your 8:56:33emotions, handle your psychology, and of 8:56:35course, manage your risk. And your 8:56:38emotions and your psychology are very 8:56:41directly correlated with your risk. So,8:56:46if you are feeling emotional, if you're 8:56:48feeling anything that is remotely 8:56:50negative and you're starting to feel 8:56:52doubt, you need to lower your risk. And 8:56:55this has saved me so much money in my 8:56:59career. Having this riskmanagement type 8:57:02of mindset where I go into trading, I go 8:57:05into every setup that I take. In my 8:57:08mind, I'm not thinking, oh, how much am 8:57:10I going to make off this setup? Oh, I 8:57:11might make 1 to 2,000 and perfect.8:57:14That's going to put me up 10K in the 8:57:15week. Amazing. No. When I go into a 8:57:17setup, I'm thinking, what is my downside 8:57:20here? Like, if this thing goes against 8:57:22me and hits my stop, how much am I going 8:57:24to lose? How volatile is this stock? Is 8:57:27there a high probability this stock is 8:57:30going to actually blow past my stop and 8:57:32I'm going to lose more money? I always 8:57:35think of the downside first. I always 8:57:37try to protect my capital. And that's 8:57:40what you need to understand as a trader.8:57:42Your priority isn't to make money as a 8:57:45trader. Your first priority is to 8:57:47preserve the capital in your account.8:57:50Capital preservation. Your second 8:57:52priority is to make money on that 8:57:56capital to make money on the, you know,8:57:58capital you have in your account. That's 8:58:00your second priority. First is capital 8:58:02preservation. And most traders,8:58:04unfortunately, don't have this mindset.8:58:06Most traders don't really care about 8:58:08their bottom line or their downside.8:58:09They just care about making money. They 8:58:12just care about quitting their job,8:58:13living this life of freedom. And yeah,8:58:16those are some of the best perks when it 8:58:18comes to trading. But you'll never 8:58:20realize them unless you adopt this 8:58:23riskmanagement mindset. And there's a 8:58:26very common cycle that most traders go 8:58:30through here. And I kind of drew up a 8:58:32little rough representation here, but a 8:58:34lot of times a trader will make a 8:58:36mistake. Maybe it's an honest mistake.8:58:38Maybe you underrisisked on a trade or 8:58:40you overrisisked on a trade or you 8:58:42messed up your management or you took 8:58:44the wrong trade. Maybe you fomoed in 8:58:46whatever you make a mistake. What does 8:58:48that lead to? A lot of the times an 8:58:50emotional crash out, right? And guys, we 8:58:53are not robots, right? Like I hate this 8:58:56advice that you constantly hear on the 8:58:58internet that's like, "Oh, if you're a 8:59:00trader, you have to trade like a robot.8:59:03You have to trade like an algorithm."8:59:05Bro, we are human beings. We feel 8:59:08emotions. Unless you're like a 8:59:10psychopath, you feel emotions. And 8:59:13especially in trading, those emotions 8:59:15are strong. They're almost violent.8:59:17Where a lot of the times we sometimes 8:59:20feel like completely different people 8:59:23when we trade. Like we go into the 8:59:25trading day feeling composed, feeling 8:59:27good, you know, ready to follow our 8:59:29plan. And then and then as soon as the 8:59:31market opens and you begin trading,8:59:33right, things happen, prices move, you 8:59:35lose money, you make money, and that 8:59:37changes your psychology, changes your 8:59:39emotions, and next thing you know,8:59:41right, if you make a bad mistake or two,8:59:43you're having a full-on crash out,8:59:44you're getting emotional, you're 8:59:46starting to sweat, you have that 8:59:48psychological pressure, right? And this 8:59:51happens to a lot of traders. Maybe it 8:59:54doesn't happen to you every day, but 8:59:55maybe let's say once or twice a month,8:59:57you have this sort of emotional crash 8:59:59out. Now, my biggest suggestion,9:00:01honestly, is to just step away from your 9:00:04desk. But that's hard for a lot of 9:00:06people, right? Let's be real. It's going 9:00:08to be difficult for a lot of you guys to 9:00:09step away from your desk, but the least 9:00:12you can do is decrease your risk. But 9:00:16unfortunately, what most people end up 9:00:17doing is they have this crash out,9:00:19right? and they're like, "Oh my god, I 9:00:21have to make back the money that I just 9:00:23lost. Oh, I was up a thousand. Now I'm 9:00:25only up 200. I have to make that back."9:00:27Right? What do they do? They increase 9:00:29their risk. And as soon as they increase 9:00:32their risk, they have this mindset of,9:00:34"I need to make money." Right? It's 9:00:35ultimately greed. That's what's causing 9:00:37this. You're increasing your risk 9:00:39because of greed. And greed is what's 9:00:43stopping you from making money in the 9:00:45first place. Isn't that ironic? Greed is 9:00:47our desire to make money. Your desire to 9:00:50make money is what's stopping you from 9:00:52making money. So you increase your risk 9:00:54and what happens? You take another trade 9:00:57and you end up losing money, right?9:00:58Because you overrisisked or maybe from 9:01:00there you took a lowquality 9:01:03C++ setup, maybe a D setup and you end 9:01:06up losing more money because you 9:01:08increased your risk and that usually 9:01:11leads to another emotional crash out or 9:01:13you making even more mistakes. And this 9:01:15is how the cycle begins. And the thing 9:01:17is, [snorts] you only have to go through 9:01:19one of these cycles to ruin months of 9:01:23progress. You could be perfectly trading 9:01:26according to your plan for two months,9:01:29managing your emotions, and you have one 9:01:30day where this happens where you have 9:01:33this crash out. You know, everything's 9:01:35going wrong, and all of a sudden, you 9:01:37increase your risk. Now, you lose,9:01:40you're losing money, and you're giving 9:01:41back months of profits, months of 9:01:44progress. And some traders even just 9:01:46blow their entire account. And this is 9:01:48just the unfortunate reality of most 9:01:51traders. This is what happens. And you 9:01:54need to avoid this at all costs. And 9:01:57ideally, you just decrease your risk 9:02:00when this happens. Right? So the real 9:02:02cycle should actually be you make a 9:02:05mistake, you have that emotional crash 9:02:08out. That's fine. Sometimes I get 9:02:09frustrated too. It's a part of trading.9:02:11From there, you lower your risk or you 9:02:14just step away in the first place. Let's 9:02:16say you don't step away. Lower your 9:02:18risk. And from there, you can rebuild 9:02:21your confidence, right? You take trades 9:02:24with smaller risk, right? Then let's say 9:02:27those end up being winners. Yeah, it's 9:02:29still on small risk, but you're 9:02:31rebuilding your confidence. And once 9:02:33you're back to like, okay, I'm feeling 9:02:35myself. I'm feeling good, right? I'm not 9:02:39emotionally unstable anymore. or I'm 9:02:40norm, you know, I'm feeling great. Maybe 9:02:42one to two days later after you've 9:02:45rebuilt the confidence, you're able to 9:02:47re-raise your risk to where it was 9:02:49originally. And from there, even even if 9:02:52a mistake happens, right? Maybe even if 9:02:55you get emotional, you have like a 9:02:57protocol ready where you're ensuring 9:03:00that you're not going to lose a lot of 9:03:02money in your account, you're protecting 9:03:04yourself, right? you have a protection 9:03:06protocol where you decrease your risk 9:03:08when you find yourself um feeling doubt 9:03:12or uncertainty or stress, high emotions 9:03:14or lack of confidence, any one of those 9:03:16things. So, before I go over some key 9:03:18situations that I guarantee you have 9:03:21faced as a trader and show you how to 9:03:23actually apply this rule in practice in 9:03:26the moment, I want to talk about the 9:03:29riskmanagement 9:03:30formula. And it blows my mind that 9:03:33people don't know how to calculate this.9:03:36They don't know how to size their 9:03:38positions. And I'm going to show you by 9:03:41how much you should decrease your risk 9:03:43by if you are feeling doubt or 9:03:46uncertainty. So right off the bat before 9:03:48we enter any single trade, our risk is 9:03:52predetermined. We don't go into a trade 9:03:55not knowing how much we're going to lose 9:03:58if the trade hits our stop- loss. We go 9:04:00into the trade knowing that if it hits 9:04:02our stop at this specific price, I'm 9:04:05losing X amount. That risk is 9:04:07predetermined. As a result, you need to 9:04:11size your positions correctly. So, if 9:04:15the trade does hit your stop, you're 9:04:17only losing your predetermined risk. And 9:04:20your sizing is like your share size or 9:04:23your lot size, right? And the formula 9:04:25for this is really, really simple. It's 9:04:28risk, your dollar risk divided by entry 9:04:31price minus stop-loss price, right? So,9:04:34let's say you on average risk $500 per 9:04:39trade. And let's say the entry price for 9:04:41that trade is $3, right? Let's say you 9:04:44take like a breakout opportunity. Entry 9:04:47is at $3. Stop loss is below the base is 9:04:50at 290. Great. So, if it hits your entry 9:04:53at three bucks, you get into the trade.9:04:55And if the trade goes back down and hits 9:04:58your stop loss at 290, you exit and you 9:05:01get stopped out. Now, you need to buy an 9:05:05appropriate amount of shares to make 9:05:08sure that if it does hit your stop,9:05:09you're only losing $500. And this is the 9:05:12reason why we use this formula. So, you 9:05:13take the uh entry price, you put it 9:05:16here. Stop loss price, you put it in 9:05:18here. And then, you know, $500, which is 9:05:21your risk, is divided by that. So $3 9:05:24minus 290 is 10. 500 divided by 10 cents 9:05:27is 5,000 shares. So if you get 5k shares 9:05:31at three bucks and then it stops you out 9:05:33at 290, you're going to lose $500. It's 9:05:36very important that you do this 9:05:37calculation before any trade that you 9:05:39take. I have to include it in this video 9:05:41because it's crucial. It's you have to 9:05:45do it. It's not optional, right? And 9:05:47let's say you're starting to feel 9:05:48uncertainty. What you can do is you 9:05:51lower this risk amount from let's say 9:05:54from 500 and let's actually type it.9:05:56Let's say from 500 you're feeling 9:05:58uncertain. You're not feeling good about 9:06:00your trading. You're like, you know 9:06:00what? I want to decrease my risk. I'm 9:06:02going to decrease it by half. So now 9:06:04it's $250. Great. These numbers don't 9:06:07change, but your risk changes. And as a 9:06:10result, your share size changes as well.9:06:13So now you're getting less size for your 9:06:16positions, right? your share size is 9:06:19decreased because your risk has 9:06:21decreased. And I recommend doing it 9:06:23maybe by half or by 60%. It depends 9:06:26honestly how you're feeling. This is 9:06:28more discretionary. It's up to you how 9:06:30much you want to decrease your risk by.9:06:32Uh but I recommend half. If you're if 9:06:34you're feeling really really down on 9:06:36yourself and you're just not trading the 9:06:38way that you know how to trade and 9:06:40you're just feeling off, lower your risk 9:06:42by half. Okay. Now, let's talk about 9:06:43some key situations that where this 9:06:46could be truly truly applied. So, let's 9:06:48kind of go over it here. So, there's a 9:06:50bunch of situations. Uh we'll start off 9:06:52going through kind of uh the first one 9:06:54here. So, let's say you're up $1,000 on 9:06:58the day. You're feeling good. You see 9:07:00another quality setup. You want to make 9:07:03another 500 to a,000 on the day, right?9:07:05So, let's say it's lunchtime. You're up 9:07:06a,000 bucks, feeling great. You traded 9:07:09well. you see another really nice setup 9:07:12and you're like, "Hey, I think I can 9:07:13make 1,500 to 2,000 bucks today. I'm 9:07:15feeling good. Let's make some money."9:07:17Right? You're feeling pumped up. Then 9:07:19all of a sudden, you completely mess up 9:07:21that setup and instead you end up losing 9:07:23$200 and now you're at $800 for the day,9:07:26right? Let's say $200 is your 9:07:28predetermined risk. So you lost your 9:07:30predetermined risk, everything's fine,9:07:32but now you're like, "Ah, I was up 9:07:34a,000. Now I'm up or yeah, now I'm up 9:07:37only 800." You know, maybe that $1,000 9:07:40is like a psychological level that you 9:07:42want to see your profits above a,000.9:07:44You're like, "No, I need to get back up 9:07:46above a th00and." And what you do is you 9:07:49raise your risk, you end up overtrading,9:07:51and then you finish the day in the 9:07:53negative. So, what went from a nice 9:07:56solid $1,000 day, you take a trade, you 9:07:59lose your risk, you're only up 800 now,9:08:01and you're like, "No, I need to be up 9:08:03more than a thousand." you overtrade,9:08:05you lose your confidence, you increase 9:08:07your risk, and as a result, you give 9:08:10back everything. I guarantee this has 9:08:12happened to you and you need to avoid 9:08:13this, right? And general rule of thumb 9:08:15is uh always protect 70 to 80% of your 9:08:18profits in a trade, right? So, if you're 9:08:20up a thousand, you need to at least 9:08:22finish the day up 7 to 800. Okay?9:08:25General rule of thumb, this is a great 9:08:26situation. So, maybe when you're up a 9:08:28thousand and you're like, "Okay, I'm 9:08:30good here. I'm feeling good. I want to 9:08:32make sure I finish above a th00and,9:08:33lower your risk for the rest of the day.9:08:36If you're feeling like you're you're 9:08:38good, you're good with your profits 9:08:39right now. If you do see a really high 9:08:41quality trade that's like A+, sure, use 9:08:44your regular risk. I'm not saying don't 9:08:45do that, but I'm saying lowering your 9:08:47risk could be a good solution for you uh 9:08:49to make sure you're not giving back too 9:08:51much. Next, let's say you take three 9:08:54really nice, highquality setups and 9:08:56lose. You take three good setups that 9:08:58fit your plan, but they they lose you 9:09:00money. Now you're starting to feel 9:09:02emotional and frustrated. You increase 9:09:04your risk and next thing you know you're 9:09:05down five, six, seven Rs, right? You 9:09:09don't want to do that, right? You don't 9:09:10want to do that. If you take three high 9:09:13quality trades in a row, you know,9:09:15you're following your plan, you're 9:09:16taking the right setups and they lose,9:09:18that's fine. That's going to happen 9:09:19sometimes. The worst thing you could do 9:09:21from here is raise your risk to try to 9:09:24make back what you lost, right? If you 9:09:26are feeling a little bit uncertain and 9:09:28frustrated after three losses, lower 9:09:31your risk, rebuild confidence, and then 9:09:33raise your risk back up. Or if you have 9:09:36a three-day losing streak, you're down 9:09:38three days in a row. Maybe it's your 9:09:39fault, maybe it isn't. Maybe it's a 9:09:40tough environment. Maybe there's other 9:09:42external factors in your life that's 9:09:44stopping you from trading to the best of 9:09:46your ability. It could be for any 9:09:47reason. If you have a three-day losing 9:09:49streak, I don't care what the reason is.9:09:51Lower your risk. Hands down. lower your 9:09:54risk by 50 to 70%. Or it's a heavy news 9:09:57day and there's, you know, crazy things 9:10:00going on in the market. Markets are 9:10:02really volatile, volatile. The market 9:10:04might be changing, right? The 9:10:06environment might be changing. This 9:10:08happens a lot to a lot of new traders 9:10:10where they make a bit of money three,9:10:12four, five months and then the market 9:10:14kind of switches and they fail to adapt,9:10:17right? like or maybe goes from a bullish 9:10:18market to a bearish market or a bearish 9:10:20market to a sideways market. And traders 9:10:23fail to adapt and the same strategies 9:10:26that they were making on money on 9:10:27before, they're not making money on 9:10:29those strategies anymore. And next thing 9:10:32you know, they're they're feeling 9:10:33frustrated. They're feel like nothing is 9:10:35working. They increase their risk. They 9:10:36try to make their money back and they 9:10:38blow their entire account. Right? If 9:10:39you're noticing that's a weird day in 9:10:41the market, heavy news day, the market 9:10:42is adapting, decrease your risk. find 9:10:45comfort in that market. Start to develop 9:10:48confidence in that market. And once 9:10:50you're feeling good, increase your risk 9:10:52back to the normal amount. Or guys,9:10:54honestly, maybe you're trading in a new 9:10:56location. Like I was traveling in Europe 9:10:58this past month. It was a, you know, I 9:11:00was in the hotel rooms with a different 9:11:01monitor than I'm used to. Uh the Wi-Fi 9:11:04was a little bit weird. Uh different 9:11:06location, different setting. I'm trading 9:11:08now in the afternoons versus the 9:11:09morning. That kind of affects you as a 9:11:11trader. I'm a I'm a creature of habit. I 9:11:13like consistency. I like having a 9:11:15structured day. And when I was trading a 9:11:17little bit in Europe, I traded a couple 9:11:18days per week, honestly, just for my 9:11:20students. Um, it was weird. So, what did 9:11:23I do? I decreased my risk until I felt 9:11:26comfortable enough to increase it back 9:11:28to the normal amount considering my 9:11:30environment changed. Okay, hopefully 9:11:33this makes sense, guys. And the reason 9:11:34this is so important guys genuinely most 9:11:37people think that you need new 9:11:39strategies, you need a new methodology,9:11:41you need new indicators, you need much 9:11:44higher reward to risk to make more 9:11:46money. That couldn't be farther from the 9:11:48truth. The easiest way easy obvious 9:11:51nothing is easy in trading. I'm saying 9:11:52the simplest way to make more money is 9:11:54to simply limit the amount that you 9:11:56lose. And the and the way that I came up 9:11:58with this number right here, 378,000,9:12:02is this right? I have there's 252 9:12:05trading days per year I believe some 9:12:06somewhere around there. I've been 9:12:08trading for five years. Call it give or 9:12:10take 1,200 trading days. It's a nice 9:12:12round number.9:12:14If I'm able to have this mindset of and 9:12:17this rule of lowering my risk when I'm 9:12:20in doubt or just having that 9:12:22riskmanagement 9:12:24mindset like just living my life being 9:12:26fiscally conservative and being 9:12:28conservative with my trading just having 9:12:30this overall mindset of worrying about 9:12:32my downside over my upside. If that can 9:12:34save me an extra $300 per day, I'm going 9:12:37to make an extra $378,000 9:12:40over five years. That's an extra 75K a 9:12:42year, guys, by doing nothing by but 9:12:46adopting this mindset. That's the only 9:12:48thing I changed risk management mindset 9:12:50and having this rule. If this rule saves 9:12:51me $2 to $300 per day for the rest of my 9:12:54career, which I risk around 500 bucks to 9:12:56trade around there between three to 700,9:12:59I have more of like a range. Um, if this 9:13:01is able to save me two to three hundred 9:13:02bucks a day, and that might be even 9:13:05conservative, right? It might even save 9:13:07me way more money. I'm I'm I'm making an 9:13:10extra 75K per year just because of that.9:13:13Not by learning new strategies or trying 9:13:15out different things, new indicators.9:13:17No, just by having this mindset, I'm 9:13:19making more money, right? By the end of 9:13:22the week and the month, if if you're 9:13:25just able to limit your losses on your 9:13:28losing trades, you're going to make more 9:13:30money, right? And no one talks about 9:13:32this. Everyone talks about exciting new 9:13:33stuff in your trading, new whatever 9:13:35strategies and indicators like I 9:13:36mentioned, but no one talks about this.9:13:39And this is how I've saved so much money 9:13:42in my career by just applying this rule 9:13:45and not getting so emotional and not 9:13:47increasing my risk and then losing all 9:13:49my money. Right? When in doubt, lower 9:13:52your risk. I don't care, you know, if 9:13:53you're not feeling good, frustrated,9:13:55stressed, whatever. It could be because 9:13:58of reasons outside of your trading.9:13:59Maybe you're you got into a fight with 9:14:02your spouse or maybe um someone upset 9:14:04you in your personal life. You're going 9:14:06into trading not feeling the best. Lower 9:14:09your risk, okay? Just trust me. Just do 9:14:11it and rebuild that confidence and then 9:14:13re-ra your risk. Okay? And yeah, make 9:14:15sure this is not your cycle. Okay? So,9:14:18this is a nice little summary. Yeah,9:14:20hopefully you understood the share 9:14:21sizing formula and and yeah, guys, use 9:14:23these situations. Okay? When in doubt,9:14:26lower your risk. Have that risk ma 9:14:28management mindset. This is what's made 9:14:30me a profitable trader. I I haven't had 9:14:31a losing month in over five years. And 9:14:34that sounds crazy, but I've I'm happy to 9:14:36post my statements. I've done it many,9:14:38many times on my channel and on my 9:14:39TikTok. Happy to be as transparent as 9:14:41possible. The reason I'm so consistent 9:14:43is because I have this mindset. All 9:14:46right, guys. That's it for the video. I 9:14:48hope you enjoyed. And if you need to 9:14:50help build uh your trading foundation,9:14:54you need more help with risk management 9:14:56or your strategies or the way that I 9:14:57trade, I have a free 10 plus hour course 9:15:00that is genuinely better than most paid 9:15:02courses on the internet. Seriously, any 9:15:04course you've ever taken, my free course 9:15:07will trump it. It It's just 9:15:08significantly better. I know it is. So,9:15:10uh make sure you start watching it. It's 9:15:12in the description of this video and 9:15:14it'll help build the foundation for your 9:15:16trading and it'll teach you a lot more 9:15:17stuff. um it'll expand about everything 9:15:20that I talked about today. So, start the 9:15:21free course. Um let me know what you 9:15:23think of it. Watch my other YouTube 9:15:25videos in conjunction with that 9:15:26education and yeah, leave a comment,9:15:29leave a like, subscribe to the channel 9:15:31if you found this valuable. I will see 9:15:32you guys in the next video. Thank you so 9:15:34much for watching and hopefully you'll 9:15:35take this to heart and hopefully within 9:15:37weeks you can actually apply this and as 9:15:39a result make more money. I'll see you 9:15:41guys in the next video. Thank you.9:15:45In this next chapter, I'm going to teach 9:15:47you how to combine everything you've 9:15:49learned in this free course so far with 9:15:51scanning and with trading gaps. And it's 9:15:54going to sound a little bit confusing in 9:15:56the beginning. Maybe you don't know what 9:15:57a gap is. However, you're about to learn 9:16:00it. This chapter is especially powerful 9:16:03because we're finally getting into the 9:16:05more practical side of how I scan and 9:16:08how I find highquality setups. So, make 9:16:10sure you're paying attention and let's 9:16:12hop right into this chapter. Change of 9:16:13scenery here. The hotel kicked me off 9:16:16the terrace because they knew about the 9:16:18value I was about to drop. But in this 9:16:20video, I'm going to explain what the gap 9:16:23trading model is, how it works, why it 9:16:26works, how to apply it within your own 9:16:28trading starting tomorrow. How to scan 9:16:30for these massive moves that I'm about 9:16:32to show you, and how to take advantage 9:16:35and trade those moves using predefined 9:16:38simple setups that even a beginner could 9:16:41take advantage of. And if you haven't 9:16:43realized it yet, I like to keep my 9:16:45trading as simple as possible. And this 9:16:48model is incredibly simple. It's not 9:16:51complicated. It's not complex. It's very 9:16:53easy to understand as you're about to 9:16:55witness. But the real sauce is applying 9:16:58it correctly. There are details. There 9:17:00are nuances that are important to 9:17:02understand to find high probability 9:17:05trades on high momentum stocks. Right? I 9:17:09as a trader pass on like 98% of the 9:17:12opportunities in the markets. I only 9:17:15focus on high probability, high quality.9:17:17And you have to differentiate yourself 9:17:19from all the other traders who take 9:17:21lowquality setups. There's a lot of 9:17:23traders who trade gaps who are kind of 9:17:25familiar with this model, but not a lot 9:17:27of them succeed because they focus on 9:17:30lowquality gaps in lowquality setups.9:17:32But that kind of begs the question, what 9:17:34is a gap in the first place? So, if you 9:17:37search up on Google, what is a gap in 9:17:40trading, you're going to get this 9:17:41definition. So, feel free to pause the 9:17:44video and actually read this definition,9:17:45but I'm going to simplify it even 9:17:48further. A gap is an overnight change in 9:17:52price. The stock market closes at 400 9:17:56p.m. Eastern on weekdays and it opens 9:17:58the next morning at 9:30 a.m. Eastern.9:18:02So all of the price activity that 9:18:04happens overnight, whether it's buying 9:18:07or selling, that price activity is 9:18:10reflected the next morning as a gap. So 9:18:13let's say a stock closes at $5 at 400 9:18:17p.m. Eastern on Tuesday. And then the 9:18:19next day on Wednesday, when the market 9:18:21opens at 9:30 a.m. Eastern, the stock 9:18:24opens at $8. That $3 difference in price 9:18:28is called a gap. So, it's just an 9:18:30overnight change in price because 9:18:33there's trading activity that occurs 9:18:35either in the post market or the 9:18:37pre-market. And these gaps occur because 9:18:39of news, because of earnings within the 9:18:42company, like positive earnings or 9:18:44negative earnings or events in the 9:18:46company, or maybe there was a new law 9:18:48that was passed where that affects the 9:18:51company. And as a result, investors 9:18:53either panic or they get really excited 9:18:55during the after hours trading and that 9:18:57causes the stock to gap and change in 9:19:00price overnight. However, it's very 9:19:02important to understand that we don't 9:19:04care about the news. I'm not sitting 9:19:07there every morning and reading earnings 9:19:09reports or reading the news about why 9:19:12that stock gapped or why, you know, the 9:19:14investors panicked. I don't care about 9:19:16any of that. All I care about is the 9:19:19price action. What effect does that gap 9:19:23have on the charts? So, let's go ahead 9:19:25and look at some examples. So, you could 9:19:27literally visualize what a gap is and 9:19:30you could literally see the gap in price 9:19:32on the chart. It's not really important 9:19:34where the price was for this example or 9:19:37what day this was. I'm just trying to 9:19:38prove a point here where we closed right 9:19:40here on the previous day and then the 9:19:42next morning we opened up here and you 9:19:45could literally see the gap in price on 9:19:48the chart. And that's exactly what a gap 9:19:50is. It's an overnight change in price.9:19:53This was on J&J just a couple of weeks 9:19:55ago where we closed right here and then 9:19:58the next morning we gapped down and we 9:20:00opened right here. Right? You could 9:20:02literally see the gap in the chart. So,9:20:04we have gap ups and we also have gap 9:20:06downs. And these were pretty significant 9:20:09gaps. But take a look at this one. This 9:20:10one was actually a pretty small 9:20:12overnight change in price. And always 9:20:14remember, the amount that it gaps isn't 9:20:17really relevant. What we care about is 9:20:20where it's gapping to on the charts. And 9:20:23we're about to talk about that in just a 9:20:25second. But right here, we closed at 9:20:27this price the previous day. And then 9:20:28the next morning, we gapped up right 9:20:30here. And like I said, you could 9:20:32literally see the gap on the charts. And 9:20:36you know, it's really simple. A gap is 9:20:37just an overnight change in price. So 9:20:40before I teach you how to identify 9:20:42highquality gaps and how to trade them 9:20:45step by step, it's very important that I 9:20:46debunk a very common misconception and 9:20:49myth that I always see that all gaps 9:20:52fill. And this is complete nonsense. A 9:20:55lot of traders will tell you this, but 9:20:57it is not true. And what a gap fill is 9:21:00essentially when the price of the stock 9:21:02returns to the price it was the previous 9:21:05day. So let's say a stock on Tuesday 9:21:07closes at $5 at 400 p.m. Eastern and 9:21:10then the next morning on Wednesday it 9:21:12opens at $8. A gap fill would be where 9:21:15the stock opens on Wednesday at $8 and 9:21:18then drops back to $5 and just goes back 9:21:21to the original price it was the 9:21:23previous day. So for example like on J&J 9:21:26we closed right here and then the next 9:21:28morning we open here. This is the gap. A 9:21:31gap fill would be where when it opens on 9:21:34this day it just goes back to the 9:21:36original price. Right? Or for example 9:21:38right let's take it on CHEG right here.9:21:41We closed here and then we opened here 9:21:44the next day and instead of moving up, a 9:21:46gap fill would suggest that it would 9:21:48drop back down to this original price 9:21:51essentially where it was the previous 9:21:53day. And that's what a lot of traders 9:21:55will tell you. They'll tell you that all 9:21:56gaps fill and you shouldn't really focus 9:21:59on gaps because they all fill. But that 9:22:01is nonsense. And the reason I know that 9:22:04is because I trade gaps for a living. I 9:22:06do this every single day. I've done it 9:22:08every day for the last five years and 9:22:1190% of the time I am looking to trade in 9:22:14the direction of the gap. I trade the 9:22:17continuation of the gap. So if it gaps 9:22:20up, I'm looking to go long. If it gaps 9:22:22down, I'm looking to go short. Now,9:22:25there are exceptions to this where I'll 9:22:27go for the reversal where if it gaps up,9:22:29I'll be looking for a short or if it 9:22:31gaps down, I'm looking for a long. But 9:22:33those are pretty rare and yeah, it's 9:22:35like 5 to 10% of the time. 90% of the 9:22:38time, the majority, I am trading in the 9:22:40direction of the gap. And you might be 9:22:42wondering, why do I trade gaps in the 9:22:45first place? And it's very simple.9:22:46Gapping stocks move way more than 9:22:49non-geapping stocks. And they just have 9:22:52way more momentum. And as a day trader,9:22:54I want to trade stocks that have a high 9:22:56probability of moving 10, 20, 30, 40% in 9:23:01a single day. And the gap is like a 9:23:03catalyst for that stock. I like to trade 9:23:06stocks that have a catalyst because the 9:23:08catalyst causes it to just move way more 9:23:11than non-Gapping stocks or stocks that 9:23:14don't have a catalyst. Right? So, it's 9:23:15very simple. Gapping stocks just have a 9:23:17higher probability of moving and having 9:23:19momentum in one direction and they also 9:23:22provide me a clear bias and direction in 9:23:24which I should trade in. Right? Where if 9:23:26it gaps up, I'm looking to go long. If 9:23:28it gaps down, I'm looking to go short.9:23:31It gives me what the trend is. it gives 9:23:33me that bias in which I should be 9:23:35trading in. So, let's get into how to 9:23:37trade gaps for a living step by step.9:23:40And step number one is finding gaps in 9:23:43the pre-market. So, every single morning 9:23:45at 8:30 a.m. Eastern around 1 hour 9:23:48before the stock market opens, I begin 9:23:51my morning preparation where I go to my 9:23:54trading office and I begin scanning for 9:23:56gaps. And what you're essentially 9:23:58scanning for is percent change or 9:24:01percent difference between yesterday's 9:24:04closing price and today's opening price.9:24:06And there are a bunch of different 9:24:08tools, scanners, websites that could 9:24:11actually help you accomplish this. And 9:24:13they're 100% free. And I'm also going to 9:24:15show you the specific site that I use 9:24:18every single day to scan for gaps. Now,9:24:21the first website that you could use is 9:24:23finiz.com.9:24:25And this is actually a really popular 9:24:27site for traders and investors. And I 9:24:30have used it in the past to scan for 9:24:32specific stocks. Now, I don't use Finn 9:24:35Viz for my current scanning right now. I 9:24:38just want to give you different options 9:24:40and different tools that you could play 9:24:41around with to see what you personally 9:24:44prefer. But don't worry, I'm going to 9:24:45show you exactly how I do my pre-market 9:24:48scanning to find gaps every single day 9:24:51in just a second. But once you're on 9:24:52finnvvis.com, and by the way, this is 9:24:55also a free site. So I want to show you 9:24:57free websites that you could use. So you 9:24:59don't have to pay for anything or you 9:25:00don't need to sign up for a specific 9:25:02brokerage that may or may not be 9:25:04available in your area. So once you're 9:25:05on fidden.com, just click on screener 9:25:08right here and it's going to bring you 9:25:10to this page. From there, navigate to 9:25:13technical. And if you click on right 9:25:15here, gap, if you kind of hover over it,9:25:17it'll tell you the difference between 9:25:18yesterday's closing price and today's 9:25:21opening price. Now, it might not show 9:25:23today because it's Saturday. However, if 9:25:25you click on that, you could scan for 9:25:27all gap ups or you could scan for all 9:25:29gap downs. Now, they also give you 9:25:31functionality of like specific 9:25:33percentages, but I don't see how that 9:25:35would be useful. I would just scan for 9:25:37all gap ups and all gap downs. The next 9:25:39site that is super useful is market 9:25:42chameleon.com.9:25:44And once you are on the site, you just 9:25:46hover over to stocks. And then you go to 9:25:49features pre-market trading. Just click 9:25:51on that. And this website actually gives 9:25:54you a big list of overnight gap ups or 9:25:57overnight gap downs where it gives you 9:25:59this list of gainers, percentage change,9:26:01and it'll list them in descending order 9:26:04uh based on the biggest gap ups all the 9:26:06way to the smallest gap ups. And then 9:26:08for the decliners, same exact thing. It 9:26:10gives you the biggest gap downs all the 9:26:11way to the smallest gap down. So you can 9:26:13literally just copy and paste these 9:26:15tickers onto your watch list every 9:26:17single morning. And there's other really 9:26:18cool functionality with this site. It'll 9:26:20give you the most active tickers traded 9:26:22that day. And sometimes I do kind of 9:26:24scroll through Market Chameleon during 9:26:26the intraday. For example, if I want to 9:26:28see like the top gainers on high volume 9:26:30and I'll just kind of see what stocks 9:26:32are popping off that day. You could also 9:26:34use tradingview.com where you head over 9:26:36to products, you go to screeners, and 9:26:38then you go to stocks. Now, I haven't 9:26:41actually used trading view, so you guys 9:26:43could experiment and let me know if it 9:26:45works or not. But if you go to extended 9:26:47hours, it'll actually tell you 9:26:49pre-market change percentage or 9:26:51pre-market gap percentage. And then 9:26:53you're able to sort by ascending order 9:26:55or sort by descending order. and it'll 9:26:58give you a bunch of stocks that have 9:27:00overnight changes in price, whether it's 9:27:02a gap up or a gap down. Now, in terms of 9:27:05what I personally do every single day, I 9:27:08do most of my scanning on my actual 9:27:10Think or Swim platform, just because it 9:27:12makes it easier for me. So, whenever 9:27:14you're on your watch list on Think or 9:27:17Swim, if you rightclick this thing right 9:27:19here, go to customize, you could 9:27:21actually look for percent change or 9:27:23percent change since or percent in the 9:27:26money or this wouldn't make sense, but 9:27:27percent change. I like to use mark 9:27:30percent change. I found that to be super 9:27:32useful, but you can kind of experiment.9:27:34Uh, sometimes I use other ones, but this 9:27:37is what I would do. You can kind of go 9:27:38to this column and type in percent 9:27:41change and it'll give you a bunch of 9:27:43different options. And this is exactly 9:27:45how I scan for gaps every single 9:27:47morning. It's usually a combination 9:27:48between think or swim and using percent 9:27:50change or mark percent change. And then 9:27:53I also use market chameleon in case I 9:27:56like missed out on some gaps or maybe my 9:27:59scanner on Think or Swim didn't include 9:28:01some. That's exactly what I do. Step 9:28:03number two. Now that you have your gap 9:28:05list, you have that list of stocks that 9:28:07are either gapping up or gapping down.9:28:10Now it's time to assess the quality of 9:28:13every single gap and pick the specific 9:28:16stocks that you want to focus on for the 9:28:18stock market open and throughout the 9:28:20trading day because you may have 20, 30,9:28:2240 stocks on your gap list. Sometimes 9:28:25less, sometimes more. It really depends 9:28:27on the time of year. For example, during 9:28:29earning season when companies are 9:28:31reporting quarterly earnings, they 9:28:33usually report either in the pre-market 9:28:35or in the postmarket. So, we have tons 9:28:38of gaps during earnings season. And 9:28:41that's why earning season tends to be a 9:28:43really busy time of year. And you don't 9:28:45want to overwhelm yourself looking at 9:28:46like 20 different gaps. You want to 9:28:48pick, you know, the specific gaps that 9:28:50you want to focus on for the market 9:28:52open. And there are specific criteria 9:28:54and qualities that separate highquality 9:28:57gaps from lowquality gaps. And I'm about 9:28:59to teach you how to do that. But first,9:29:01you need to check the price in which the 9:29:04stock is gapping to. So for this, you 9:29:06know, depending on what brokerage you 9:29:08use or what scanner you use or what 9:29:10platform you use, it's going to tell you 9:29:12where it's gapping to, like what's the 9:29:14pre-market price of that stock, and 9:29:16that's what you're going to look at. And 9:29:17from there you're going to go to the 9:29:19daily time frame on whatever platform 9:29:21you are using and you're going to look 9:29:23on the charts where is the stock gapping 9:29:25to. So for example on Apple we closed on 9:29:28Friday at like 200 bucks. If Apple opens 9:29:31at 190 versus let's say 173 that is a 9:29:37massive difference and that could have 9:29:39massive implications on the quality of 9:29:41the gap. So, it's important to identify 9:29:43the location in which the stock is 9:29:46gapping to because it could have a 9:29:47dramatic impact on the quality of the 9:29:50gap. So, it's very important that in the 9:29:52pre-market, you're looking at the daily 9:29:53chart, you're looking at the pre-market 9:29:55price, and you're checking where the 9:29:57stock is gapping to. Now, it's time to 9:29:59learn about how to assess the quality of 9:30:02every single gap that you look at so you 9:30:04could pick which stocks you want to 9:30:07focus on for when the stock market opens 9:30:09and throughout the trading day. And this 9:30:11is by far the most important component 9:30:14of your gap scan and your pre-market 9:30:17analysis. You need to identify the 9:30:19highquality gaps versus the lowquality 9:30:21gaps. And this is really what's going to 9:30:23differentiate you from all of the other 9:30:25gap traders out there. This skill set is 9:30:28beyond important when it comes to 9:30:30pre-market scanning and then even 9:30:32intraday scanning as well. So let's keep 9:30:35it simple, right? So, even if you're a 9:30:37beginner trader, you're going to be able 9:30:38to understand everything that I'm about 9:30:40to talk about. We are looking for gaps 9:30:43that number one are clearing directly 9:30:47above a resistance area if it is a gap 9:30:50up. Remember, I like to trade 90% of the 9:30:54time in the direction of the gap. So, if 9:30:56it's gapping up, my bias is to go long 9:30:59during the intraday time frames. In for 9:31:02that case, we want it to be gapping 9:31:04above a resistance area. We don't want 9:31:07it to be gapping into resistance. We 9:31:09want it to be clearing and gapping above 9:31:12that resistance. And I'm going to break 9:31:14down exactly what that means in just a 9:31:17second. I just want to kind of go over 9:31:18all of the points real quick and then 9:31:20we're going to go into the specifics.9:31:21And the opposite applies if it's a 9:31:23short. If it's gapping down, my bias is 9:31:26to go short. I want it to be gapping 9:31:29below support. All right? I want it to 9:31:31be clearing a key support area. So,9:31:33that's the first thing we're looking 9:31:34for. Number two, we look for gaps that 9:31:37are either ending a long-term or 9:31:40short-term trend or that are surprising 9:31:43buyers or sellers or shocking buyers or 9:31:46sellers or even trapping buyers or 9:31:48sellers. And this is so powerful. I'm 9:31:51going to show you how this works. These 9:31:53are the most powerful gaps that you 9:31:55could possibly find. Gaps that end 9:31:57trends and that shock buyers or sellers.9:32:00We also like gaps that trigger high time 9:32:02frame setups off the daily time frame or 9:32:04off the weekly time frame. And we also 9:32:07like gaps that have room to move. So 9:32:09let's say we're clearing a major 9:32:11resistance area. We want to make sure 9:32:13the stock has room to actually move up 9:32:15before it hits the next resistance area.9:32:18So these are all the points we're going 9:32:20to look for. And now let's get into the 9:32:22details. So off the bat, let's start off 9:32:25with support and resistance 9:32:26requirements. So let's break this down.9:32:28We have a very established downtrend and 9:32:31then we begin consolidating at the lows 9:32:34and we close right here the previous 9:32:37day. The next morning we gap down and 9:32:40notice how we are gapping down beneath 9:32:43this consolidation. We're gapping 9:32:45beneath this area of support and that's 9:32:48exactly what you're looking for. You 9:32:50don't want it to gap into the 9:32:52consolidation. You want it to gap 9:32:54underneath support, underneath the 9:32:56consolidation. So, it's actually 9:32:58clearing every single low, right? You 9:33:01want it to be opening below every single 9:33:03low right here. And that would 9:33:05effectively mean it's gapping below 9:33:06support. Same thing applies if it's 9:33:08above resistance, established uptrend,9:33:10and then we begin to consolidate at the 9:33:12highs. We close here the previous day 9:33:14and the next morning we gap up. Notice 9:33:17how we're not gapping into the highs.9:33:19We're gapping over the highs. We are 9:33:21clearing these highs, right? So, we're 9:33:24gapping above that resistance area. And 9:33:26that's exactly what you want to look 9:33:28for. Now, another really key point is 9:33:31that notice how I said directly above 9:33:34resistance. I didn't say a massive 9:33:36amount above resistance. I said directly 9:33:39above. Right? So, we don't want massive 9:33:43massive gaps above resistance or below 9:33:46support. A lot of people think that the 9:33:48bigger the gap, the better the gap, and 9:33:50that's not necessarily true, right? So,9:33:52let's say instead of us opening here, we 9:33:54opened all the way down here, way below 9:33:57support. We don't want that, right? We 9:34:00want it to be gapping directly below 9:34:02support, not like crazy far away from 9:34:05support. Does that make sense? Next,9:34:07instead of it opening directly above 9:34:09resistance like it is here, imagine it 9:34:11opened all the way up here, which you 9:34:13know is has a massive distance between 9:34:16yesterday's closing price. It's way 9:34:18above this resistance area. We don't 9:34:20want that. We oftent times actually call 9:34:23these mega gaps when the gap is so big 9:34:26that it almost loses its power. It loses 9:34:30its effect because it's just completely 9:34:32gapping off of the charts. And a lot of 9:34:34the investors, right, like imagine you 9:34:36were in it short right here and all of a 9:34:39sudden it gaps all the way up here,9:34:40right? You might like panic sell, but 9:34:42you might also just be like, "Okay,9:34:43well, I'm just going to wait until it 9:34:44comes in. I'm already down so much 9:34:46money. I'm just going to wait until it 9:34:47comes back down." So, we want it to be 9:34:49directly above resistance. directly 9:34:51below support, not like a massive amount 9:34:54away from support or resistance, right?9:34:56And that's really demonstrated here as 9:34:58well, right? So, we don't want it to be 9:35:00gapping into support. We want it under 9:35:02support. So, this is an example of it uh 9:35:04gapping into support or gapping into 9:35:06resistance. We don't want it to be 9:35:07opening into the previous low or into 9:35:10the previous high. We want it to be 9:35:12clearing the previous low or clearing 9:35:14the previous high. Does that make sense?9:35:16All right. Now, let's go ahead and move 9:35:18on. We also look for gaps that end 9:35:22trends because they could be 9:35:24unbelievably 9:35:25powerful because they ultimately trap 9:35:27and shock the buyers or sellers. So,9:35:30here's a really good example of that 9:35:31where you have a really established 9:35:33downtrend, right? You close right here 9:35:35the previous day and then all of a 9:35:36sudden the next morning you open right 9:35:38here, right? Like think about how 9:35:40shocking that could be. Let's say you're 9:35:42in it short either from here or from 9:35:44here or from here. You know, you're 9:35:46you're going to sleep at night feeling 9:35:48good. Your position is up. It's looking 9:35:50lower. Everything's great, making money,9:35:52and all of a sudden the next morning it 9:35:54gaps all the way up to basically right 9:35:56here where it essentially just ends the 9:35:58downtrend. Like, think about how you 9:36:00might feel waking up to your position 9:36:02now down hundreds and hundreds of 9:36:04dollars or thousands of dollars or 9:36:06hundreds of thousands of dollars. Think 9:36:08about if you're an institution who went 9:36:10short right here, for example, and all 9:36:11of a sudden the stock is opening up 9:36:13here, right? That's going to put 9:36:14pressure on you and everyone who went 9:36:17short to ultimately cover their 9:36:19position. And when they cover their 9:36:21position, they're buying their shares 9:36:22back. That's what gives prices the 9:36:25momentum to move higher, right? Or a gap 9:36:27that ends an uptrend, right? Let's say 9:36:30you went long right here and the price 9:36:32closed here the previous day. You're 9:36:33feeling good. You're making money and 9:36:34all of a sudden it opens down here. Next 9:36:36morning prices are down here. Aren't you 9:36:38going to panic? You're going to be like,9:36:39"Oh my god, I'm down. I'm losing a lot 9:36:41of money." uh you know, and let's say it 9:36:43begins to drop. Let's say it starts to 9:36:45drop a little bit and then you're like,9:36:46"Oh my god, it opened. My position is 9:36:48more and more in the red. I'm losing 9:36:50more and more money, right? That's going 9:36:51to put more and more pressure on you to 9:36:53just cut your losses and sell." And 9:36:55that's what gives prices the momentum to 9:36:58continue lower. And this is why gaps 9:37:00that end trends or that shock buyers or 9:37:03sellers are powerful because it puts 9:37:05those buyers and sellers in a position 9:37:07that they don't want to be in. it puts 9:37:09them in a position where they have to 9:37:10cut their losses or otherwise they're 9:37:12going to lose way more money already.9:37:16And we also like to look for gaps that 9:37:18are uh below green bars if we're going 9:37:21short, right? Or above red bars if we're 9:37:24going long. So if it's opening below a 9:37:27green bar, it is trapping all of the 9:37:30buyers from the previous day. And if 9:37:32it's opening above a red bar, it's 9:37:34trapping all of the uh sellers from the 9:37:38previous day, right? So, a gap below a 9:37:40green bar is powerful. A gap above a red 9:37:42bar is powerful. And I know we kind of 9:37:45just went over theory, but let's look at 9:37:47some reall life examples here. So, let's 9:37:49take the PLC. This is a gap from a 9:37:51couple of weeks ago where on the 9:37:52previous day we closed right here, and 9:37:54then the next morning we opened right 9:37:55here. So, let's see if it fits the 9:37:57criteria, right? We want a gap that 9:37:59opens below support. This is a support 9:38:01area. This is a support area. Yep. We're 9:38:03opening below this support area. We're 9:38:05also essentially ending this uptrend,9:38:07right? We have this kind of mini little 9:38:09trend here. We're ending that trend and 9:38:11we're also gapping below all of these 9:38:14green bars. Like think about it.9:38:15Everyone who bought it this day or this 9:38:18day or this day, they're waking up to 9:38:19now price is moving against them. That's 9:38:21going to put pressure on them to cut 9:38:23their losses and sell. And that's 9:38:24exactly what happened. And we saw really 9:38:26nice follow-through on this day. And we 9:38:29actually, you know, dropped right into 9:38:31this prior support area. So this support 9:38:33area was kind of like target, right? We 9:38:35gapped right here. Next support area, we 9:38:37looked to the left. Next support area 9:38:39was was target. And that's exactly where 9:38:41it dropped to. Really beautiful gap. And 9:38:43in fact, it continued lower. And this is 9:38:44the daily chart. So it continued lower 9:38:46the rest of the week. So you could see 9:38:47how powerful this could be even for like 9:38:49swing trading, right? Where you could 9:38:51find really powerful daily gaps that are 9:38:54ending trends that are clearing support 9:38:56that have room to fall. And you can even 9:38:58look for ways to swing trade it. Take a 9:39:00look at this gap right here. So, we have 9:39:02this kind of like multi-week 9:39:03consolidation. We have a very clear 9:39:06support area right here. We gap directly 9:39:08below it. We gap directly below a green 9:39:11bar. And we also kind of have a setup on 9:39:13the chart. We're kind of consolidating 9:39:15here, consolidating. So, we have a setup 9:39:17on the higher time frames. We have a 9:39:18breakdown. And we trigger that breakdown 9:39:21through a gap down. We open here, which 9:39:23like I said, below support. And if you 9:39:25look to the left here, we do have kind 9:39:27of a bunch of resistance. We have this 9:39:29resistance area right here. And we also 9:39:31have this pivot right here. But this 9:39:33stock just didn't care. It had so much 9:39:35momentum to the downside. I don't know 9:39:37what the news was, but it had so much 9:39:39momentum. This was such a massive 9:39:41catalyst for the stock that it just 9:39:43ripped through all of that support. And 9:39:45it was just a picture perfect gap. And I 9:39:47remember um watch I remember kind of 9:39:50writing this stock off in the pre-market 9:39:52because I didn't think it was liquid 9:39:54enough to trade. And then funny enough,9:39:55it was and it just produced such a 9:39:57massive move. All right, now let's look 9:39:59at the NASDAQ. Let's look at the Q's 9:40:02real quick. And there was just an 9:40:03unbelievably powerful gap on it right 9:40:06when the tariffs really came out where 9:40:09we topped here, we moved down, then we 9:40:12kind of bounced around and I think a lot 9:40:14of people were saying that we bottomed 9:40:16on the NASDAQ right here. This is the 9:40:18QQQ. This is the tracking ETF for the 9:40:20NASDAQ. A lot of people were telling me 9:40:22um I was reading on Twitter, a lot of 9:40:23people thought that we bottomed and a 9:40:25lot of people were going aggressive with 9:40:27longs thinking that the market bottomed.9:40:29We had three green bars in a row and I 9:40:32think we ended up gapping down the next 9:40:34day from here to right here. And look at 9:40:36the effect that this had on the chart.9:40:39And by the way, we're gapping below 9:40:41three green bars. And notice how it's a 9:40:43downtrend. Or we have a high, we have a 9:40:44low, we have a lower high, then we have 9:40:46a lower low and a lower high. And then 9:40:48we gap down right here. And it just 9:40:51shocked all of the buyers who bought it 9:40:53the previous day. And you could see that 9:40:55I mean, look at the move that it 9:40:56triggered here. And we literally just 9:40:57basically capitulated right after that.9:41:00Unbelievably powerful gap, right? It 9:41:02trapped all of the buyers who bought it 9:41:04the last 3 days on this gap and then it 9:41:06just completely tanked. Beautiful. And 9:41:08you could even say that this was kind of 9:41:09a higher time frame setup that this was 9:41:11like a sell setup. This was a 9:41:12retracement into the declining 20 MA on 9:41:15the daily time frame. going over what 9:41:18those setups are and how to apply them 9:41:20with this GAP strategy. However, I 9:41:23highly recommend watching my free 10 9:41:25plus hour trading course. It is 9:41:26genuinely better than most paid courses 9:41:29on the internet and you can combine 9:41:31everything that you learn in my free 9:41:33course with a lot of my YouTube videos 9:41:35to really build the foundation for your 9:41:37trading. So, I highly recommend going to 9:41:39my free course and learning about the 9:41:41sell setup that I just talked about or 9:41:43the buy setup that I am about to talk 9:41:45about. And of course, the breakout, the 9:41:47breakdown, the one, two, three, and all 9:41:48of the other setups that I trade. So,9:41:50let's take a look at this APLD. We 9:41:52bottomed here. We went on a nice little 9:41:54uptrend. We have a rising 20 period 9:41:56moving average below price. We have a 9:41:58high here and then we begin to pull back 9:42:00and we have three red bars in a row. And 9:42:02then the next day, I believe we open 9:42:05somewhere right here. So, we opened 9:42:07above those red bars. We have an 9:42:09established uptrend. We also opened 9:42:11above this resistance area. And I saw 9:42:14this in the morning. And this is 9:42:15actually a setup that I called in my 9:42:17mentorship community as well. And you 9:42:18could just see the move that it 9:42:20produced. I mean, take a look at this.9:42:22Look at this move. And this was that 9:42:24day, but you could see even the next few 9:42:27days. I mean, this thing just mooned 9:42:28like crazy. But look at this gap, right?9:42:31This gap right here. And that gap was 9:42:33the catalyst for this massive move to 9:42:36the upside. We cleared over this 9:42:38resistance area. We gapped above three 9:42:41red bars and we also triggered a higher 9:42:43time frame setup. We had a very clear 9:42:46buy setup on the daily time frame. We 9:42:48have established uptrend rising 20 MA 9:42:51pullback into the rising 20 MA. We have 9:42:53an entry bar and we trigger that buy 9:42:55setup through this gap right where we 9:42:58gap up. We trigger the buy setup and 9:43:00boom, we just go off on a rocket ship.9:43:02And there was even a daily one, two,9:43:04three here as well where we had an 9:43:07igniting bar, we had a resting bar,9:43:08entry over that resting bar, stop-loss 9:43:11below, and it continued higher. So, like 9:43:13I said, watch the free course because 9:43:15like the 1, two, three, the buy setup.9:43:17It's important to know that for this 9:43:18video. All right, but I am going to go 9:43:20over briefly what that is in a second.9:43:21And I am also going to show you how to 9:43:23trade these gaps on the intraday time 9:43:25frames. Uh, let's look at Coinbase. This 9:43:26is another just beautiful, beautiful 9:43:28gap. Very similar to the APLD. We 9:43:31bottomed here. We moved up. 20 MA is now 9:43:33under price. Prices are respecting it.9:43:36And we kind of had a little bit of a 9:43:37breakout here. And we triggered that 9:43:39breakout by gapping right here. We're 9:43:41gapping above this resistance. We're 9:43:44gapping above this resistance. We're 9:43:45gapping above the 200 period moving 9:43:48average. We're opening right here. You 9:43:50look to the left. We have plenty of room 9:43:52to the next resistance area, which is 9:43:54really like right here. So, we have 9:43:55plenty of room to move higher. And let's 9:43:58take a look at the move that it 9:44:00produced. And Coinbase was just 9:44:02brilliant that day. I mean, such a nice 9:44:03gap right above the 200, above all this 9:44:06resistance. Beautiful setup on the 9:44:08charts, right? We have kind of a move up 9:44:09basically a breakout. We have a breakout 9:44:11right here. And that breakout was 9:44:12triggered by this daily gap. All right,9:44:15let's move on. Let's look at the UNH.9:44:18Um, and this was the company that there 9:44:20was a lot of news on it. A lot of people 9:44:21were talking about it um on Twitter and 9:44:23a lot of people were discussing how 9:44:25United Health, you know, this was like I 9:44:28think it was like $600 and you'll see 9:44:30where it ended up gapping to, but I 9:44:31think we opened right here somewhere 9:44:33around there, right? So, this thing very 9:44:35solid uptrend. This thing looked like it 9:44:37was going to make new all-time highs and 9:44:39all of a sudden it ends this uptrend 9:44:42completely. I mean, this is a extremely 9:44:44established trend to the upside. It 9:44:46looks higher. If anyone any professional 9:44:49or retail trader looks at this chart,9:44:51they're like, "Yep, that looks higher.9:44:52This is an established trend." And we 9:44:54open right here below this pivot, right?9:44:57We are kind of into an a little bit of 9:44:59an area of support, but it just didn't 9:45:01matter at all because you could see what 9:45:03happened directly after on that day. We 9:45:06just had such nice follow-through to the 9:45:07downside. And this is what happened 9:45:09afterwards, right? So, this was that day 9:45:11and you could see where the stock ended 9:45:13up falling to. This gap essentially 9:45:16ignited a brand new trend because it 9:45:20shocked all of the buyers who were in it 9:45:22long basically this entire trend higher,9:45:25right? It shocked everyone. It trapped 9:45:27all of these buyers, all of the 9:45:29long-term investors, all of the traders.9:45:31And you have to understand when you have 9:45:33a really powerful gap like this that 9:45:35ends a trend or gaps below a lot of 9:45:38green bars, it's almost like a snowball 9:45:41effect of selling because think about 9:45:42it, right? It opens here, it starts to 9:45:45drop. Maybe there are some traders or 9:45:47investors that are like, "Hey, you know,9:45:48this is a good company. I'm just going 9:45:50to wait until this moves back up,9:45:52right?" So, it drops, then it drops 9:45:54again, then it continues to drop, and 9:45:56all of a sudden, their position is 9:45:57becoming more and more red, and it 9:45:59becomes a snowball effect of selling.9:46:01And that's why these gaps are just have 9:46:04such a strong catalyst, and that's why 9:46:06they move with so much momentum. And we 9:46:09as professionals could take advantage of 9:46:10that snowball effect. we could take 9:46:12advantage knowing that those investors 9:46:14and traders are trapped and they're 9:46:16likely probably going to sell. So, this 9:46:18is a really good example of a gap that's 9:46:20ending a trend. Let's look at CHAG. This 9:46:23was oh my god, picture perfect. So, we 9:46:25have a really established downtrend. I 9:46:27mean, look at the 20 MA. Look at how 9:46:29well prices are respecting the 20 MA. I 9:46:32actually have a video on my YouTube 9:46:33channel that teaches how to use the 20 9:46:34period moving average. I also teach it 9:46:36in my free course. But so we move down 9:46:38and we have basically you know a little 9:46:40base breakdown. We have a little bit of 9:46:42a uh consolidation here at the lows and 9:46:45it maybe there were some investors that 9:46:47thought that hey this thing double 9:46:48bottomed I'm going to start buying here 9:46:50and it started to move up. People 9:46:51thought that hey maybe check bottom 9:46:53maybe check is about to move higher.9:46:55They started to go long and all of a 9:46:56sudden we opened like right here 9:46:59directly below this support. We trapped 9:47:02the buyers who bought it the last 3 days 9:47:05and were continuing also the longterm 9:47:08trend and it was just beautiful. And I 9:47:10remember trading in this day. I mean it 9:47:12made me a bag. I don't remember this was 9:47:13weeks ago. I don't remember exactly how 9:47:14much it made but it was such a nice 9:47:16trade. And look at this. I mean picture 9:47:18perfect. It it closed at the lows. It 9:47:21closed literally at the lows of the day 9:47:23because it was such a powerful gap. It 9:47:24was continuing this long-term trend to 9:47:26the downside. It shocked the buyers who 9:47:28bought it the last 3 days. And also it 9:47:30triggered basically a sell setup break 9:47:33uh daily time frame. We have a sell 9:47:34setup consolidation at the lows. We 9:47:36triggered that setup by a gap down.9:47:38Beautiful. And notice how we didn't gap 9:47:40down here and dropped. We gapped 9:47:42directly below support. Beautiful.9:47:44Trapping all the buyers. Just picture 9:47:46perfect, honestly. All right, let's 9:47:47continue onward. We have the yex. So 9:47:50this was essentially just a base 9:47:52breakout on the daily time frame. I 9:47:54think we opened right here or so. So, we 9:47:56were clearing essentially this entire 9:47:59area of resistance and the next 9:48:01resistance was basically all the way up 9:48:03here, right? And it didn't really shock 9:48:05any buyers or sellers, right? Cuz you 9:48:06look at the previous day, it was 9:48:08actually coming off a green bar. So, it 9:48:10was already getting bought. It just 9:48:11essentially continued that momentum the 9:48:13next day. And let's look at what the gap 9:48:15ended up doing. And boom. I mean, insane 9:48:17green bar. Notice this is literally the 9:48:19biggest green bar on the chart. Look at 9:48:22all of the candlesticks. The biggest 9:48:23green bar was ignited from a gap where 9:48:26it essentially triggered a base breakout 9:48:28above resistance and it actually cleared 9:48:30the previous resistance as well. It 9:48:32literally cleared it. It was such a 9:48:33powerful gap. Beautiful. Beautiful. All 9:48:34right. And by the way, all of these 9:48:36charts, this is not me cherrypicking. I 9:48:38do this pre-market scan every single 9:48:41day. Not only for myself, but for every 9:48:43single one of my mentorship students 9:48:45that trade live with me every single 9:48:47day. We do this analysis every morning 9:48:49at 9:00 a.m. All right. So all of these 9:48:51stocks are stocks that were just on my 9:48:53personal scanner that we either traded 9:48:55that day and made money off of or it was 9:48:57like on our radar and maybe maybe we 9:48:59didn't catch that specific trade but it 9:49:01was on our watch list. Let's look at the 9:49:03CHAG. Another great example here right 9:49:05here we have a red bar. We closed right 9:49:07here. Then we opened right here. Now 9:49:09this wasn't that great of a gap and I'll 9:49:11tell you why. We do have an established 9:49:12uptrend, right? Respecting the 20 MA.9:49:15Respecting the 20 MA. This was a really 9:49:16nice buy setup by the way. Moved up,9:49:18retraced. Really nice buy setup. We had 9:49:20a nice red bar the previous day. So, it 9:49:22started to get sold. I'm assuming the 9:49:24people who bought it started to take 9:49:26profits and then all of a sudden it was 9:49:27gapping from here to right here. But it 9:49:29was gapping right into this area of 9:49:31resistance and it was also gapping into 9:49:33the 200 period moving average. Now, it 9:49:35didn't care. It still went higher. But 9:49:38the point that I'm trying to make is not 9:49:39every gap is going to be a picture 9:49:42perfect gap. They're not always going to 9:49:44be perfect, right? like A+ A+. I don't 9:49:47want to say they're rare, but you're not 9:49:48going to get them every single day.9:49:49You're not going to get five a day.9:49:51Sometimes you could still make money off 9:49:53of like B gaps or even C++ gaps, right?9:49:56And we do that. All right, but generally 9:49:57speaking, you do want to trade the 9:49:59highest quality of gaps. Okay, so I just 9:50:02gave you a ton of different information 9:50:04to understand for how to assess the 9:50:07quality of a gap and what we 9:50:10specifically look for, but you probably 9:50:11are a little bit still confused on how 9:50:13to actually trade these gaps. Like where 9:50:15do we enter? What do we actually do when 9:50:18we see a high quality gap on the daily 9:50:21time frame? And you need to understand 9:50:23that the gap sets the bias. And from 9:50:26there, once we know what the bias is,9:50:29once we know what specific stocks we 9:50:31want to focus on, the ones that have the 9:50:33highest quality gap, once we know the 9:50:35direction, right, we go to the intraday 9:50:38time frames to trade that bias. We don't 9:50:41just buy a gap up, right? Let's say you 9:50:43have a really interesting gap up. It's 9:50:45clearing over resistance. It's trapping 9:50:48sellers. It's ending a downtrend. It's 9:50:51looking really good on the daily time 9:50:53frame. We don't just buy it. No, you 9:50:55need an intraday setup. So, the gap sets 9:50:58the bias. It sets the direction in which 9:51:01we want to trade in. And from there, we 9:51:03combine that with the intraday 9:51:05predefined simple setup. And we're about 9:51:08to talk about that. But I know people 9:51:09are going to ask me about time frames.9:51:11So, in the pre-market, I'm scanning for 9:51:13gaps. I'm picking which stocks I want to 9:51:15focus on for the market open. And then 9:51:16when the market does open, as I'm 9:51:18looking at the daily chart and where the 9:51:20stock is opening, I'm looking at the one 9:51:23and the two-minute charts from like 9:30 9:51:25to 10:00 a.m. And I'm also looking at 9:51:28the 5m minute as well, closer to 10:00 9:51:29a.m. Then from 10:00 a.m. to 12:00 p.m.9:51:31And this is Eastern time, by the way.9:51:33I'm looking at like the two-minute chart 9:51:35and the five-minute charts. And I'm also 9:51:36looking at starting to look at at the 9:51:3815-minute chart as well. And then from 9:51:4012 to the end of the day, I'm primarily 9:51:43looking at the five and the 15minute 9:51:44time frames. Now, even when I'm scanning 9:51:47for new stocks to trade that day, I'm 9:51:49always looking at the daily chart first.9:51:52I'm always assessing what is the gap or 9:51:55is there a gap in the first place? And a 9:51:57lot of times, if there's no gap, I don't 9:52:00even look at the intraday time frames.9:52:01If the daily chart isn't interesting,9:52:03there's no quality gap, there's no 9:52:05momentum, the daily doesn't really have 9:52:08anything to be interested in. I don't 9:52:09even go to the lower time frames. I look 9:52:11at the daily chart. I assess, is there a 9:52:13gap? Yes. Great. Is there a high quality 9:52:16gap? Yes. Great. That's when I go to the 9:52:18intraday time frames to look for a 9:52:21setup. Now, what setups do we trade? And 9:52:24it's really simple, guys. Like I said,9:52:26just watch the free course. It'll teach 9:52:27you all this. But we look for either a 9:52:30retracement setup or a consolidation.9:52:33So, this is essentially a buy setup or a 9:52:35breakout. That is exactly what I trade.9:52:38All right? We keep it really, really 9:52:39simple. Right? I don't like to over 9:52:41complicate my strategies. is I don't 9:52:43like to use crazy indicators. I keep my 9:52:45trading as simple as possible. I think 9:52:47the simplest things in life are oftent 9:52:48times the most brilliant. I keep it 9:52:50simple. So once I have the bias to trade 9:52:53that bias, I either trade a retracement 9:52:55pattern which is a buy setup or I trade 9:52:57a breakout which essentially is like a 9:52:59consolidation pattern. Now, I also want 9:53:01to show you a strategy that you can 9:53:04implement literally in the first few 9:53:06minutes of the day. Because there are 9:53:08times where I will hop into a trade that 9:53:10has a really high quality gap right off 9:53:13the open, like the first 5 minutes of 9:53:15the day, because sometimes these gaps,9:53:17let's say you have a really nice gap 9:53:19down, it won't set up. It'll just go.9:53:21And sometimes you kind of have to just 9:53:23jump into it to uh capitalize on the 9:53:26trade. However, we don't want to just 9:53:27randomly jump in. We still want 9:53:29structure for our trades even if they're 9:53:32right at the open. But, you know, at the 9:53:33open there hasn't been enough time to 9:53:36pass, right? If we're 2 minutes into the 9:53:37day, there's only two one minute 9:53:39candlesticks. You can't really read a 9:53:41setup from that. You can't read a 9:53:42breakdown or a or a sell setup or 9:53:44anything. So, what you can do is use the 9:53:46high low pattern. And I think a lot of 9:53:48people call this the orb strategy, like 9:53:50the opening range breakout. Listen, I 9:53:52really don't care what you call it. I 9:53:54don't study the orb. Like I saw that on 9:53:57Tik Tok and it was kind of similar to 9:53:58what I know as the high low strategy,9:54:01but doesn't matter. This is the strat.9:54:03So what you're going to do is you wait 9:54:04for either the first one minute, 2 9:54:06minute, 5 minute or 15 minute candle to 9:54:08form. So the first one forms either 1 9:54:11minute into the day, 2 minutes into the 9:54:12day, 5 minutes into the day, or 15 9:54:14minutes into the day depending on the 9:54:15time frame you're looking at. Now if 9:54:17you're going long, right? Let's say it's 9:54:19a bullish gap up and you want to go 9:54:20long. What you can do is you place your 9:54:23entry above the first candlestick, stop 9:54:26loss below. So you can put your entry 9:54:28above the first candlestick right here.9:54:30Okay? And you put your stop-loss below 9:54:33that first candlestick. And this 9:54:35provides structure. So you have a really 9:54:38nice gap up. You're noticing that it 9:54:40looks like it's about to pop. it looks 9:54:42like it wants to really get going and 9:54:44move to the upside right off the bat in 9:54:46the morning instead of just hopping in 9:54:48randomly with no risk management, no 9:54:50stop-loss, no predefined entry, you now 9:54:52have structure for the trade. You put 9:54:54your entry below the highs of the first 9:54:56candlestick. You put your stop loss 9:54:57below the lows of the first candlestick.9:54:59Now, the same thing applies when going 9:55:01short. It's just the opposite. You would 9:55:02place your entry below the lows. You 9:55:05place your stop loss below the highs.9:55:07And right off the bat, I already know 9:55:08what you're thinking. You're like,9:55:09"Okay, this is easy. Just wait for the 9:55:11first candlestick to form. And then if 9:55:13you're long, entry above, stop loss 9:55:15below. Going short, entry below, stop 9:55:17loss above. Makes sense. But which time 9:55:20frame do we use? Which time frame do we 9:55:21look at? Do we look at the 1 minute or 9:55:23the 2 minute or the 5 minute or the 9:55:2515-minut? And ultimately that is up to 9:55:28you. It really depends, right? So my 9:55:31suggestion is if you do it off the 1 9:55:34minute or the 2minut, especially right 9:55:36off the market open, that stock could be 9:55:38so volatile that it's going to quickly 9:55:40stop you out. My recommendation is to 9:55:42wait for either the five or the 15 to 9:55:45form. You know, maybe if you want to be 9:55:47super aggressive, you could do it off 9:55:48the two-minute where the first two 9:55:50minutes pass by, you have a two-minute 9:55:52bar and that's what you do the high low 9:55:54strategy off of. My recommendation, I 9:55:56think a really good sweet spot is using 9:55:58doing it off the fiveminut. And the 9:56:00issue with doing it off the 15, right,9:56:02is you might end up having a massive 9:56:0415-minute candlestick, right? And then 9:56:07all of a sudden you put your entry 9:56:08above, stop-loss below. You have a 9:56:10really big stop. So now you have limited 9:56:13reward to risk. And then the upside of 9:56:16doing it off the one minute time frame 9:56:17is you might have a super small bar,9:56:19right? So you have really, you know,9:56:21entry here, stop loss here. You have a 9:56:23really small bar. You have really, you 9:56:25have a really tight stop. You have a 9:56:26high reward to risk. But this thing 9:56:28might end up triggering right and then 9:56:30immediately stopping out and then you 9:56:32end up losing a full R one or two 9:56:35minutes into the day because the stock 9:56:36is so volatile because it's right at the 9:56:38open. Does that make sense? So you need 9:56:40to find a sweet spot. Uh my 9:56:42recommendation is just to do it off the 9:56:43five minute personally. But if you see a 9:56:452minut high low where the first 9:56:47two-minute bar is formed, it looks good,9:56:49the stock is readable, it's not too 9:56:51volatile, it's an amazing gap, you feel 9:56:53like it's about to move, you can do it 9:56:56off the two-minut and use the high low 9:56:58strategy off the two entry above, stop 9:57:01loss below if you're going long or entry 9:57:03below, stop loss above if you're going 9:57:05short. So now we understand that the gap 9:57:08sets the bias. It gives us the direction 9:57:11in which we want to trade in when the 9:57:13market opens. But we don't just randomly 9:57:15buy or randomly short on a gap up or on 9:57:18a gap down. No, we need a predefined 9:57:22intraday setup. And that's exactly why 9:57:24we go to the smaller time frames to find 9:57:27that setup. Whether that is a 9:57:29retracement or a buy setup or a 9:57:31consolidation or breakout or whether 9:57:33that's a high low strategy if it's in 9:57:35the first few minutes of the day. We 9:57:37never enter randomly. We need to have 9:57:40structure in our trading. That's why we 9:57:42trade predefined simple setups that are 9:57:45not complicated. They're easy to 9:57:47understand and they're easy to know 9:57:49where our entry is and where our stop 9:57:51loss is, which allows us to easily 9:57:53manage our risk. Now, let's go back to 9:57:55the previous setups and gaps that we 9:57:57were looking at. And let's look at the 9:57:59intraday setups on those. So, we have 9:58:01the APLD, right? So, this stock gapped 9:58:04up above three red bars over resistance.9:58:06We already went through it and let's 9:58:08look at the intraday setup that occurred 9:58:11on this day. And I actually distinctly 9:58:13remember this day because we traded this 9:58:16intraday setup. I called this in my 9:58:18mentorship group and we traded and uh 9:58:20capitalized on it. Now let's take a look 9:58:22at it. So we have a very [snorts] very 9:58:25clean 5minute buy setup, right? So what 9:58:27is a buy setup? That is a retracement 9:58:29pattern where we have a move up three 9:58:31red bars in a row. Great. Now we have a 9:58:33bottoming tail entry bar. Perfect. entry 9:58:36would go above that bar. Stop loss 9:58:37below. Target is the previous high and 9:58:39we actually surpassed that previous 9:58:42high. And if you look even later into 9:58:43the day, we kind of had another little 9:58:45buy setup right here, right? Where we 9:58:46moved up, retraced, moved higher. This 9:58:48one wasn't as high quality, but I I 9:58:50definitely like this one where we kind 9:58:52of moved higher, three red bars in a 9:58:53row, entry above, stop loss below, and 9:58:56we made a new high. But the best one was 9:58:58really this one. It was just such a 9:59:00clean buy setup. And you might be 9:59:01thinking, hold up, for a buy setup,9:59:03especially if you've gone through my 9:59:04free course, you're definitely thinking 9:59:06if it's a buy setup, then it needs to be 9:59:08close to or near the 20 period moving 9:59:10average, uh, which is this line right 9:59:12here. I understand that there is some 9:59:13distance between price and the 20 MA.9:59:16However, you need to understand that on 9:59:17a big gap, on a sharp gap up, it's going 9:59:20to take time for the 20 period moving 9:59:23average to catch up to price, right?9:59:26Because it randomly just popped, right,9:59:28overnight. And you could see why, you 9:59:30know, the 20 MA is really has such a 9:59:33sharp slope because it's trying to catch 9:59:35up to prices. So in the first like 30 9:59:38minutes of the day, even first like hour 9:59:40to hour and a half of the day, you could 9:59:42use the 9 MA in conjunction or the 10 MA 9:59:46in conjunction with the 20 MA, right?9:59:48Like these can serve as your 20 MA in 9:59:51the first hour of the day, especially if 9:59:53it's a big gap either up to the upside 9:59:56or to the downside. But you could see we 9:59:58had a beautiful gap down or gap up that 10:00:00was bullish triggering a buy setup on 10:00:02the daily here above three red bars 10:00:04above resistance and we traded that bias 10:00:06through a fiveminute buy setup. Now 10:00:08let's look at the Coinbase. We already 10:00:10went over this gap above resistance 10:00:12above the 200 above a couple of red bars 10:00:15triggering a breakout has plenty of room 10:00:18until the next resistance area. Lovely.10:00:20Now let's look at the intraday time 10:00:22frame and we see that what do we see? I 10:00:25want you guys to kind of answer that. I 10:00:26want you to pause the video and really 10:00:27think about it, but I'll tell you the 10:00:29answer. We just have an amazing uptrend 10:00:32where prices just are respecting the 20 10:00:35MA and right off the bat, we have a nice 10:00:37breakout right here over the highs, stop 10:00:39loss under the lows that kind of chopped 10:00:41around for a while until the 20 MA 10:00:43caught up and then as soon as the 20 MA 10:00:45caught up right here, that's when it 10:00:46decided to really run. So, you could 10:00:48have even even traded it as a breakout 10:00:50here uh with your entry above the base 10:00:53stop loss below this tail. You could 10:00:55even put your stop loss below this base 10:00:57if you wanted a uh tighter stop. And in 10:01:00theory, if you want to be super 10:01:02aggressive, we have somewhat of a fivem 10:01:04minute 123 here where we had a igniting 10:01:07bar, dogee bar. You could have even put 10:01:08your entry above that dogee bar, stop 10:01:11loss below if you really wanted a tight 10:01:13stop. But that's super super aggressive.10:01:15And then even here, we got a buy setup 10:01:17and buy setup again. And you can see how 10:01:18well it's respecting the 20 MA. It's 10:01:20beautiful, beautiful gap and beautiful 10:01:22uptrend on the intraday time frame where 10:01:24you could have traded either a breakout 10:01:26here and then you saw it chop around for 10:01:28a bit or you can even enter the breakout 10:01:30here or you could have traded as a buy 10:01:32setup here. Just a bunch of different 10:01:34setups that you could have traded on 10:01:35this stock, right? But that's the idea.10:01:37Gap, then you go to the intraday time 10:01:39frames and you find a setup. Let's look 10:01:40at this same exact thing on the UNH. And 10:01:42this is actually a great example. We 10:01:44already talked about the UNH. This is a 10:01:46great example of a high low where you 10:01:49could have, right? you have this first 10:01:51five-minute candle that formed. You 10:01:52could have put your entry below that uh 10:01:54first five-minute candle stop loss above 10:01:56the first five-minute candle and you 10:01:58would have capitalized on this move 10:02:00lower. Now, it would have been a really 10:02:01big stop. That's the only issue. So,10:02:04what I would have personally done is I 10:02:06would have traded this as a 5m minute 10:02:08123 igniting red bar to the downside. We 10:02:10have a resting dogee bar entry below 10:02:13that 123 stop loss above. And like I 10:02:15said, watch the free course. I keep 10:02:17saying it, but all these setups, it's 10:02:19important to understand it. I teach the 10:02:20one, two, three in that free education,10:02:22so watch it. But this could be a nice 10:02:23one, two, three, and it continued lower.10:02:25Just amazing trade, honestly. So, you 10:02:27could have done it as a high low or as a 10:02:285minute one, 123. All right. So, bearish 10:02:31gap down and we traded that bias through 10:02:33those setups that I just mentioned.10:02:34Let's move on. Che. Let's look at the 10:02:36CHAG. We already talked about it.10:02:38Beautiful gap down below these three 10:02:39green bars, continuing this long-term 10:02:41trend below support. And let's look at 10:02:44the intraday setup. And we have just a 10:02:46really clean breakdown. We move lower,10:02:48we consolidated. Check this out. You 10:02:51know what this is right here? This is 10:02:52what's called a shakeout bar. This is 10:02:54called a breakout failure where notice 10:02:56what happened. We dropped, we began to 10:02:59consolidate from there. We attempted to 10:03:01move higher and failed and then we got 10:03:04the move lower. Just beautiful, right?10:03:06You could see that topping tail. The 10:03:08buyer stepped in, tried to bring prices 10:03:11higher, and then the sellers were like,10:03:12"Nope, this is bearish. There's a 10:03:14bearish gap. you're not bringing it 10:03:15higher and they brought prices right 10:03:17back down. So, it was like a failed 10:03:19breakout. Either put your entry here,10:03:21stop loss above, right? So, entry below 10:03:23the base, stop loss above. Or you could 10:03:25have even, if you want to be aggressive,10:03:26like I remember trading this, I entered 10:03:28below this dogee, stop loss above, which 10:03:30obviously isn't textbook, right? For a 10:03:32breakdown, we want it to trigger 10:03:34underneath the base. As soon as I saw a 10:03:36breakout failure on a really bearish gap 10:03:39with a really bearish base breakdown on 10:03:42the 15-minute time frame, I was just 10:03:44like, "Yep, I'm I'm hopping in." And I 10:03:46probably I think I went to the either 10:03:47the 5minut chart or the two-minute chart 10:03:49for a much tighter stop and a much 10:03:51tighter uh entry. Let's move on to the 10:03:53yex. We already talked about the gap 10:03:55above resistance triggering this base 10:03:57breakout and let's look at the intraday 10:04:00setup. And we have just such a clean,10:04:01this is the fiveminut time frame. Such a 10:04:04clean high low. Entry above, stop-loss 10:04:06below. And look at that move. Wow. Just 10:04:09insane. And then it consolidated.10:04:11Literally, it consolidated for a while 10:04:13right here. And you could have traded 10:04:14this as a breakout. Entry above the 10:04:16base, stop loss below, and capitalized 10:04:18off this move, right? And then this 10:04:19would have been the target, which 10:04:21basically that's where it got to. All 10:04:22right. Uh, do we have any more? Yes, we 10:04:24do. Let's look at the CHAG. This is 10:04:26actually a pretty recent trade. This is 10:04:27the one that I said it wasn't that good 10:04:29because it was into resistance. But 10:04:31let's look at the intraday setup here.10:04:34And we kind of have like a one, two,10:04:36three slash breakout. So I remember I 10:04:39called this over this candle stop-loss 10:04:41below and we caught this move. But then 10:04:43there was also a really nice 5minute buy 10:04:45setup. So a lot of my students and I, we 10:04:47caught this move off this breakout, but 10:04:50then you could have even traded this 10:04:52three bar pullback, nice entry bar as a 10:04:55fivem minute buy setup really close to 10:04:57the 20 period moving average. entry 10:04:58above, stop loss below, and you would 10:05:00have literally just caught [snorts]10:05:02number one this move that pulled back.10:05:03One more buy setup and then funny 10:05:05enough, it had a base breakout. So, uh,10:05:08entry above, stop loss below. So, you're 10:05:10seeing this like on literally just a 10:05:11chag on this uptrend. How many 10:05:13opportunities did you have to enter it?10:05:15You had this initial opportunity number 10:05:17one, fivem minute buy setup, number two,10:05:19another five-minute buy setup, number 10:05:20three, and a fiveminute breakout. Four 10:05:22potential setups. You can even say five.10:05:24You could say this was a buy setup as 10:05:25well. That's six, right? And by the way,10:05:28this was like a low quality gap. This 10:05:30was like maybe a B minus C plus gap. But 10:05:33even on a B minus C plus gap, you see so 10:05:36many potentially, you know, interesting 10:05:37opportunities on the intraday to trade 10:05:40that bias. Before I do a summary of the 10:05:43entire video, this chart essentially 10:05:46explains why we focus on gaps. I want 10:05:48you to identify the two biggest candles 10:05:51on this chart. literally pause the video 10:05:54and find the two biggest candles. And if 10:05:57you did that, you would see that it's 10:05:59this one and this one. And both of those 10:06:02candles were ignited by a gap where we 10:06:05have a really nice uptrend right here 10:06:07respecting the 20 MA. We move up. We 10:06:10consolidate into the rising 20 period 10:06:12moving average. We have a really nice 10:06:14daily breakout. That breakout was 10:06:16triggered by a gap and boom, it just 10:06:19mooned from there, right? And we did 10:06:21have resistance to the left. It didn't 10:06:23care. It just went ripped right through 10:06:25it. Looking at this one, another really 10:06:27nice established uptrend. Higher highs,10:06:29higher lows. We moved up, had a nice buy 10:06:32setup into the rising 20 period moving 10:06:34average. We triggered that buy setup 10:06:36through a gap up and boom. And by the 10:06:38way, we had resistance as well to the 10:06:40left here. Did not care and it just 10:06:42ripped right through that resistance.10:06:44Right. And by the way, I always like to 10:06:45look to the left to find the next 10:06:46resistance area. So in this case the 10:06:48first resistance was right here which it 10:06:50cleared that and the second resistance 10:06:52was which was right here which it 10:06:54literally just it cleared that as well.10:06:55Uh but usually I like to use resistance 10:06:58areas and support areas as my target for 10:07:01uh trading gaps and trading the intraday 10:07:03setup on the gap. Now quick little 10:07:05summary guys. We learned exactly why we 10:07:07trade gaps. They have way more momentum.10:07:10They have a catalyst behind its movement 10:07:11and they just move way more than 10:07:13non-gapping stocks. 90% of the time I am 10:07:17trading in the direction of the gap.10:07:19Right? There are exceptions to this.10:07:21There there are times where I'm going 10:07:22against the gap, but I'm not going to 10:07:24talk about it in this video. We already 10:07:25talked about a ton of different stuff.10:07:27One more thing I should note is that if 10:07:29you have a gap up, right, we are looking 10:07:31to go long. But let's say we have a gap 10:07:33up and it starts to sell off and it 10:07:35starts to drop. I just don't focus on it 10:07:37anymore. I don't trade it short. I just 10:07:39don't focus on it. So, I don't like to 10:07:40trade the gap fill. I trade in the 10:07:42direction of the gap. And if it starts 10:07:44to fill the gap, I just ignore it. Same 10:07:46thing if it's a gap down, I'm looking to 10:07:48go short. That's my bias. But if it 10:07:50starts to move up, most of the time I 10:07:51just I don't focus on it anymore. Right?10:07:53We learned about how to find gaps in the 10:07:55pre-market, all the different websites.10:07:57I like to use Think or Swim and I do use 10:07:59Market Chameleon at times. We check the 10:08:01price and from there we check. Is it 10:08:03clearing above resistance or is it 10:08:05clearing below support? Is it shocking 10:08:07any buyers or sellers? Is it triggering 10:08:09a breakout or a buy setup on the daily 10:08:11time frame? Does it have room to the 10:08:13next resistance area? Right? We talked 10:08:14about what we look for when it comes to 10:08:16support and resistance requirements. And 10:08:18then from there, we talked about just a 10:08:20bunch of gaps and what we specifically 10:08:22look for in gaps. And remember, we want 10:08:24gaps that are powerful that are shocking 10:08:27buyers or sellers that are making buyers 10:08:30and sellers uncomfortable to be in the 10:08:32positions that they're in. And that's 10:08:34where the biggest opportunities lie.10:08:37Very, very important. And the final note 10:08:39I would say is that always remember we 10:08:41don't trade the gap. We need a setup.10:08:44Right? We can't just enter randomly into 10:08:47a nice gap up. We need an intraday 10:08:48setup. Whether that's a retracement or a 10:08:50consolidation or a high low strategy.10:08:53The next chapter covers a very important 10:08:55concept in trading. And it's called 10:08:57trade management. And I'm going to teach 10:08:59you exactly how to manage your positions 10:09:02when you're actually in the trade. I'm 10:09:04going to teach you when to trail your 10:09:06position. I'm going to teach you how to 10:09:07extract as much profit as possible from 10:09:10a winning trade and how to limit your 10:09:13losses on your losing trades. The first 10:09:15step when you're looking at a potential 10:09:17setup is to find your entry point.10:09:19However, the second step is to manage 10:09:22the position to the best of your ability 10:09:25so you can make as much profit as 10:09:27possible while protecting your downside.10:09:30And that's exactly what this chapter 10:09:32covers. So, I'm going to be giving you a 10:09:34ton of different trade management 10:09:36strategies. So, let's hop right into 10:09:38this chapter. What is going on, guys?10:09:41Hope you're having a great day. Today,10:09:43we're going to be talking about managing 10:09:46your position, right? Trading 10:09:49management. And I got a cup of coffee 10:09:51with me and we're going to be learning 10:09:54some amazing stuff. So, let me get a 10:09:56quick sip before we actually begin.10:10:01Okay.10:10:03So, I know a lot of people struggle with 10:10:06this topic where they enter into a trade 10:10:10and let's say they begin making money,10:10:13right? They're in they're profiting and 10:10:15they don't know exactly what to do,10:10:17right? They don't know whether to to 10:10:19just take profits or, you know, they 10:10:22don't know how to exactly manage that 10:10:24position.10:10:26And you have to you guys have to 10:10:27understand that managing your position 10:10:28is an art. It's not a science. Okay?10:10:31There isn't one way to do it. In fact,10:10:34every trader is going to have sort of a 10:10:37different trading management system,10:10:40right? Something that suits, you know,10:10:42himself. And you kind of find that out 10:10:44over time through experience. Through 10:10:46experience, you're going to learn what 10:10:48suits your personality and what sort of 10:10:50trading management works for your type 10:10:53of positions. But let's just get right 10:10:55into the presentation here. Okay, we got 10:10:58how to manage your trades. Let's go. So 10:11:03let us consider two different 10:11:06possibilities here. We have outcome 10:11:08number one. So let's assume you just 10:11:11opened a new position. You have already 10:11:14identified your entry, your stop-loss 10:11:17and targets for the position, right? So 10:11:20if it's a buy setup, if it's a breakout,10:11:23if it's a breakdown, maybe it's a one 10:11:25two three, whatever it is, you should 10:11:27already know exactly what your entry 10:11:29price is. stop-loss price and what your 10:11:31target price is or approximate target 10:11:33price. Now, let's say the trade doesn't 10:11:36work out in your favor and the trade 10:11:38actually hits your stop-loss. You're 10:11:41going to exit the uh exit the position 10:11:43and take the loss. There's really no 10:11:46confusion here. If it hits your 10:11:48stop-loss, you exit the position. Okay?10:11:51There's there's only really one outcome.10:11:53If the trade doesn't work in your favor 10:11:56and it hits your stop-loss, there's 10:11:58really no management necessary. You've 10:12:00already identified your stop-loss prior 10:12:03to you even taking the trade. So, if it 10:12:06hits your stop-loss, you're out of the 10:12:08position. No questions asked, no 10:12:11confusion. Okay. Now, let us consider 10:12:14another outcome. Let's say the trade 10:12:16that you took is a winner, right? You 10:12:18get into the trade and it starts going 10:12:20in your favor and it's a winner.10:12:23your the trade, you know, which it 10:12:25doesn't matter what security it is,10:12:27whether it's a stocks, crypto, forex,10:12:29whatever. Let's say it's approach 10:12:31approaching target, right? And this is 10:12:34assuming you chose a target prior to the 10:12:36trade. There's going to be certain 10:12:38situations where,10:12:41you know, before you enter a trade,10:12:42you're not going to be able to identify 10:12:44a target, right? And we're not I don't 10:12:47really want to get into that too heavy.10:12:49We're going to be talking uh about that 10:12:51during the you know picking targets 10:12:53class. But let's say you know you the 10:12:56security is approaching target or it's 10:12:58approaching the point where you want to 10:13:00start taking profits.10:13:02What do you do? Are you just going to 10:13:04exit the position once it hits target 10:13:06completely? What if the position 10:13:09continues more in your favor and you 10:13:11actually miss out on some profits?10:13:13Right? Like let's say it hits your 10:13:14target, you completely exit the 10:13:16position, but then the stock or crypto 10:13:19and your trade it continues going in 10:13:21your favor and then you end up missing 10:13:23out on all those additional profits. You 10:13:27really don't want that to happen to you.10:13:29You don't want to miss out on more 10:13:31potential profits by exiting the trade 10:13:34too early.10:13:36Okay? And that's where trading 10:13:37management comes in. That's when you 10:13:40know your distinct management system 10:13:43will come into play and you'll know 10:13:45exactly what to do um once your position 10:13:49actually hits target. All right. So 10:13:52before we go into it, I just want to 10:13:55clarify a specific topic because I use 10:13:58this phrase a lot and I think you guys 10:14:00should know what it means. So I usually 10:14:03call it just getting shaken out of of a 10:14:05position. So if I ever say getting 10:14:08shaken out of a position, this is what 10:14:10it means. So let's say you enter a 10:14:13position and you set your stop-loss.10:14:16Before the stock or crypto in your trade 10:14:19goes in your favor and it eventually 10:14:22hits target, let's say it hits your 10:14:24stop-loss force uh first, forcing you 10:14:27out of the position and therefore 10:14:29missing the move, right? So let's say 10:14:31you get into a trade, right? the trade 10:14:34hits your stop-loss and right after it 10:14:37hits your stop- loss, it immediately 10:14:40starts going in your favor and it, you 10:14:42know, and you would have, you know, you 10:14:44would have made money on the trade for 10:14:47the fact if it didn't hit your stop 10:14:48loss, right? So, that's what's that's 10:14:50what's um getting shaken out. That's 10:14:52that's what that means, okay? Where it 10:14:54hits your stop loss and then it ends up 10:14:56continuing in your favor anyway. So, how 10:14:59do you eliminate getting shaken out of a 10:15:01position? Well, number one, it's don't 10:15:04set too tight a stop losses. And I know 10:15:08that's kind of contradictory, right? We 10:15:10talked about in the risk management 10:15:12videos that you want to look for tight 10:15:14stop- losses, right? And now all of a 10:15:16sudden, I'm saying, "Oh, you can't have 10:15:19too tight of stop losses cuz you might 10:15:21get shaken out of the position, right?"10:15:23And it's kind of like a conflict. You 10:15:26you kind of have to pick the perfect 10:15:29stop-loss, right? And my recommendation 10:15:33is just pick pick the correct stop-loss 10:15:36for that setup. Right? If it's a base 10:15:38breakout, we know that we always place 10:15:40the stop-loss under the base, right? If 10:15:43it's a buy setup, you know, we always 10:15:45place the stop-loss under our entry bar,10:15:48right? So, I would say just stick to the 10:15:50basics. Like stick to um stick stick to 10:15:54what I've taught you guys. But this is 10:15:57kind of an issue. It's kind of uh 10:15:58they're kind of like butting heads where 10:16:00you know you don't want to get shaken 10:16:01out of the position but you also don't 10:16:03want to have too large of a stop loss 10:16:06because then you're not going to really 10:16:07have all that much reward to risk. Okay,10:16:09hopefully that makes sense. And so how 10:16:13to eliminate it? Yeah, don't set too 10:16:14tight of stop losses. Give the stock or 10:16:17crypto some room to fluctuate. Okay,10:16:20worst case, if you'll set a larger 10:16:23stop-loss, it may mean less reward to 10:16:27risk, but at least you're not going to 10:16:29get stopped out and be forced to enter 10:16:31again or miss the opportunity 10:16:33altogether, right? So, you might have to 10:16:36set a little bit larger of a stop-loss,10:16:39therefore making your stop larger,10:16:42right? Therefore,10:16:44uh you know, you're going to have uh a 10:16:46worse reward to risk because you're not 10:16:48going to be able to buy or short as many 10:16:51shares, right? But, you know, that sucks 10:16:56or whatever, but at least you're not 10:16:58going to get shaken out and see that 10:17:00trade end up going in your favor anyway.10:17:03So, keep this concept in mind that you 10:17:05never want to get shaken out of a trade.10:17:07You never want it to hit your stop loss 10:17:09and then have it go in your favor 10:17:11anyway. So, let's take a look at this 10:17:13example here. It kind of looks a little 10:17:14confusing, but let's walk I'm going to 10:17:16walk you guys through it. We have a 10:17:18rally and we start to get a base, right?10:17:21And we know what setup this is. This is 10:17:23a base breakout, right? And let's say 10:17:26your entry is right here, right? It's 10:17:30your entry is over the base, right? So,10:17:33you're going to get triggered into the 10:17:35position right here with this green bar.10:17:38So, it hits your entry and now you're in 10:17:41the position, right? And let's say for 10:17:44this position, you end up placing your 10:17:46stop loss right here, right under these 10:17:49candlesticks. And remember, according 10:17:51to, you know, the textbook theoretical 10:17:53version that I taught you guys, you 10:17:55should always be placing your stop loss 10:17:58under the lows of the base, right? So,10:18:01the correct way to place your stop loss 10:18:03would be under the lows of the base,10:18:05which is this bar. So, this right here 10:18:09is the correct stop-loss. But let's say 10:18:13you wanted to have a higher reward to 10:18:15risk. So, you ended up putting your stop 10:18:17loss up here instead of here, right? So,10:18:21you place your stop loss here instead of 10:18:23under the absolute lows of the base 10:18:25because you wanted to improve your 10:18:26reward reward to risk. Now, let's say 10:18:29you get triggered into the position and 10:18:31all of a sudden the next bar is a red 10:18:33bar and we get a drop and it actually 10:18:37hits your stop loss that you placed 10:18:39here, right? It hits your stop loss 10:18:41here. It liquidates you out of the 10:18:43position before you know on the next 10:18:46bar, the next bar completely explodes 10:18:48and it goes right back up and makes new 10:18:51highs, right? But unfortunately, you're 10:18:54you're not in this play anymore because 10:18:56it hit your stop loss here, right? How 10:18:59to avoid this? Well, you know, you 10:19:01should have placed your stop loss 10:19:02correctly in the beginning and put it 10:19:04underneath the absolute lows of the 10:19:07base. So, as a result of you having your 10:19:10stop loss here, you got shaken out of 10:19:12the position before the trade actually 10:19:15went into your favor and would have 10:19:18produced very nice profits. So, what's 10:19:21the conclusion here? Because you decided 10:19:24to use a tighter stop-loss, right? use 10:19:27this stop loss instead of this one. Uh 10:19:30uh you got liquidated and you missed 10:19:32this move higher. Okay, so the theme 10:19:35here guys is place correct stop losses.10:19:38Don't try to place too tight a stop 10:19:40losses. Otherwise, you'll get you'll 10:19:42have the risk of uh getting shaken out 10:19:44of the position before it ends up 10:19:46continuing in your favor. Anyway,10:19:48hopefully this makes sense, guys. I know 10:19:50I kind of repeated myself a bunch of 10:19:52times, but it's important that you guys 10:19:55understand this and hopefully this all 10:19:57makes sense. If it doesn't, either, you 10:20:00know, go ahead and ask me in the server 10:20:02or just re-watch this video. Okay, so 10:20:07how do you manage positions that reach 10:20:10target? Right, so let's say your trade 10:20:14has reached your target price, right?10:20:16you were in it from down here and all of 10:20:18a sudden it hit your target price. What 10:20:21do you do from here? Well, you really 10:20:24have two options. Option number one, you 10:20:27take profits. You just exit the position 10:20:29as it hits target and you take your 10:20:32profits and it's a winning trade.10:20:33Perfect. Or number two,10:20:37you trail your position and you raise 10:20:40your stop. Okay? And we're going to talk 10:20:43about this in a second, but this for 10:20:44number the the second option, that's 10:20:47where the trading management comes in.10:20:50So, let's talk about option number one.10:20:53Let's talk about the take-profit option 10:20:54first. So take profit. You can either 10:20:59number one exit your entire position,10:21:02right? Where you just liquidate your 10:21:04entire position. You're completely out 10:21:06of the trade. Or number two, you take 10:21:10some profit here and you leave the rest 10:21:12of the position open in case it 10:21:15continues higher in your favor. Right?10:21:18So by doing option number two here,10:21:21you're securing profit. Right? At that 10:21:23point, it's a it's 100% a profitable 10:21:26trade. You're securing profits and then 10:21:28you're allowing 10:21:30um you know that other half of your 10:21:32position or the other um you know 10:21:35whatever whatever however much you left 10:21:37in the position you let that run and 10:21:39hopefully make you more profits. So that 10:21:42ends up and and by the way you might be 10:21:44thinking okay but you know how much of 10:21:46the of the position should I take right 10:21:49like if you want to take some profit how 10:21:51much profit should I take um my 10:21:54recommendation is take at least 50% of 10:21:57your profits if you made $200 take 10:21:59secure at least 100 or even do you know 10:22:0275% where you secure um let's say like 10:22:07$150 10:22:08right out of 200 and you let the other 10:22:10$50 kind of run. In worst case, if you 10:22:12lose that $50, well, you you secured 150 10:22:17already, it's for sure a winning trade.10:22:19But when we, you know, when we're 10:22:21talking about leaving the rest of the 10:22:23position open, right? We take some 10:22:25profits and we leave the rest of the 10:22:26position open. Well, that begs the 10:22:28question, how do we manage the rest of 10:22:31the shares that you left? You know, how 10:22:33do you manage those shares that you left 10:22:35in the position? What do you do with 10:22:36them? When do you take profits for them 10:22:38for those shares? Where do you place 10:22:40your stop loss for those shares? Okay,10:22:41so let's get into it. I'm going to take 10:22:43a sip of my coffee real quick. So, one 10:22:44second.10:22:51Okay, perfect.10:22:53So, your first option um in trailing 10:22:57your position, right? So, the stock 10:23:00reached target. However, you still think 10:23:02this this can continue higher, right?10:23:05So, let's say it hits your target. Let's 10:23:07say this is a buy setup, right? This is 10:23:09a it pulled back. This is a buy setup 10:23:12and the buy setup hits your target,10:23:14right? But you think this still has 10:23:17potential to move higher. What do you 10:23:19do? So, what you could do is wait for 10:23:22the pullback to complete, right? I'm 10:23:25talking about this pullback and raise 10:23:28your stop to the new pivot low. And this 10:23:32doesn't only apply to a pullback. Let's 10:23:35say it ends up basing as well. You could 10:23:37also raise your stop loss to the um to 10:23:41right under the lows of the base. So 10:23:44like I said, you wait for the pullback 10:23:46to complete and you raise your stop to 10:23:47the new pivot low. So this is your 10:23:49original stop loss, right? We have a buy 10:23:51setup here and your stop loss is under 10:23:54this entry bar. What you could do as 10:23:56soon as it hits target, let's say it 10:23:58pulls back or it bases,10:24:00you raise your stop loss to that new 10:24:04pivot or the new lows of the base. Okay?10:24:08So, by raising your stop loss, what 10:24:11you've done here is you have 100%10:24:15secured profits because remember your 10:24:17entry is right here, right? Your entry 10:24:20is right here. By raising your stop, you 10:24:24have secured profits,10:24:26right? Because let's say you raise your 10:24:28stop here and it let's say it attempts 10:24:30to go higher, but then it fails and then 10:24:32it hits your new stop. Well, if it hits 10:24:35your new stop, you know, at the end of 10:24:37the day, you're still making money 10:24:38because you know this stop is over your 10:24:41entry. So, what are the pros of this?10:24:43Well, number one, you give yourself the 10:24:45ability to aim for a larger target while 10:24:49securing profits with this new 10:24:51stop-loss.10:24:53What are the cons? Well, the cons is the 10:24:56pullback can continue and you can give 10:24:59back your profits. And it's talking 10:25:00about this pullback, right? Where let's 10:25:02say you hit target right here and you 10:25:05think this can continue higher and 10:25:07you're waiting for this pullback or 10:25:09you're waiting for that base so you 10:25:11could raise your stop loss. but instead 10:25:13this pullback just continues dropping 10:25:16and dropping and dropping and it ends up 10:25:18hi hitting your original stop. That 10:25:21might happen and then you end up having 10:25:23a a winning trade go negative and hit 10:25:27your original stop-loss. You definitely 10:25:29don't really want that to happen either.10:25:31So, at the end of the day, guys, it's 10:25:32kind of up to you. You know what I mean?10:25:34I'm kind of giving you guys the 10:25:36different uh strategies that exist, but 10:25:38it's up to you for, you know, what you 10:25:40actually want to do. But in general 10:25:42guys, you always want to raise your stop 10:25:44loss. It's a very good way of securing 10:25:47profits while allowing the position to 10:25:49continue higher. So this is one way of 10:25:51doing it where you're raising it to the 10:25:52new pivot low or you're raising it to 10:25:54the new um to the new uh low of the 10:25:58base.10:26:00Now let's talk about another way you can 10:26:03trail your position. So let's say the 10:26:05stock, right? This is a buy setup,10:26:07right? We get a pullback. You have a buy 10:26:09setup. You enter here. Your stop loss is 10:26:12right here. Let's say the stock or 10:26:14crypto has reached your initial, excuse 10:26:17me, it's reached your initial target,10:26:20right? However, you still think this can 10:26:22continue higher. What do you do? What 10:26:25you can do is trail the position bar by 10:26:29bar. Okay, what does that mean? So, as 10:26:32soon as the target is reached, you trail 10:26:35the position to the prior bars low.10:26:38Right? So, let's say 10:26:41you have, you know, th this is the bar 10:26:43that hits target, right? This is the bar 10:26:46that hits target. What you can do is 10:26:48raise your original stop to this bar's 10:26:51low.10:26:53Okay? You raise your original stop to 10:26:56this bar's low. So, in that case, if it 10:26:59goes against you, well, it's going to 10:27:00hit your stop loss and you've secured 10:27:02profits, right?10:27:04And once you know, let's say this bar 10:27:07has finished forming, then you're going 10:27:10to raise this stop to this stop to under 10:27:13this bar lows. And then as soon as this 10:27:15bar finishes forming, you raise it to 10:27:17that bar's lows. So, as you can see, as 10:27:20each bar is moving higher and higher and 10:27:24higher, you're continuously raising your 10:27:27stop your stop loss to each bar's low.10:27:31And by doing that, you're giving the 10:27:34trade, you're giving the stock or crypto 10:27:36room to fluctuate, right? It like let's 10:27:40say that you raise your stop loss here 10:27:42and this bar is already forming. It 10:27:44gives this bar the opportunity to go up 10:27:46and down and up and down a little bit 10:27:48before it continues higher. Like, you 10:27:51know, like remember stocks in crypto,10:27:52they don't just go infinitely up.10:27:54Sometimes they go up, sometimes they go 10:27:55down. By continuously raising your stop,10:27:58you're giving that stock or crypto room 10:28:01to fluctuate while also, you know,10:28:03having a tight enough stop-loss where 10:28:05you're able to secure profits. Okay. So,10:28:08what's the pros here? Well, you give the 10:28:10trade some room to continue higher while 10:28:12you're maximizing profits. However, a 10:28:14con of this is if you're thinking to 10:28:16yourself, okay, cool. I I get the theory 10:28:18of this, right? I get the idea. when it 10:28:20when it hits target, you're raising your 10:28:22stop loss to the to uh you know the bars 10:28:25low. But which time frames am I going to 10:28:28use? Which candlesticks am I going to 10:28:29use? That's where the difficulty comes 10:28:33in. It's kind of difficult to decide 10:28:36which time frame you're going to use.10:28:38But guys, by, you know, either trailing 10:28:40your position this way or by trailing 10:28:43this your position this way, what you're 10:28:45doing is you're allowing the trade to 10:28:48continue 10:28:49um earning you more and more money even 10:28:52though it already hit your target.10:28:54Right? So th by doing this you're giving 10:28:57yourself the opportunity to still have 10:29:01stop losses securing profit but also 10:29:04giving the stock or crypto the 10:29:05opportunity to you know make really big 10:29:08gains right to make to it gives you the 10:29:10opportunity to have huge winners right 10:29:13because you're constantly raising your 10:29:15stop loss as the stock or crypto 10:29:17continues higher okay hopefully that 10:29:19makes sense so trailing barby bar time 10:29:21frames let's talk about the different 10:29:23time frames you could use. Right? So, if 10:29:26you're swing trading, right? Remember 10:29:28swing trading, that's, you know, you're 10:29:30looking at the uh daily chart and the 10:29:33weekly charts and then you're using the 10:29:34hourly charts for entries. Um, if you're 10:29:38swing trading, you can trail your 10:29:39position bar by bar on either the hourly 10:29:43or daily time frame. Okay? Hourly or 10:29:47daily time frame. So, uh, I I can 10:29:51actually go ahead and show you guys, uh,10:29:55an example of that. Let's see. I don't 10:29:57have my charts up, actually, my Trading 10:29:59View charts up at the moment, but I can 10:30:01show you guys an example in a different 10:30:03class. Um, showing you guys how to apply 10:30:05this. But,10:30:07um, right. So, you're going to trail it 10:30:09bar by bar on the hourly or daily time 10:30:11frame if you're swinging trading. If 10:30:13you're day trading, it becomes a lot 10:30:15trickier because you can either tr 10:30:18choose to trail it on either the one 10:30:20minute or the two-minut chart or can you 10:30:22could also use the 515 or hourly time 10:30:25frame. You have a lot of options when it 10:30:27comes to trailing it on uh trailing it 10:30:31if you're day trading, right? If you're 10:30:33looking for a tighter trail, right? And 10:30:35what that means is you're looking for,10:30:37you know, tight stop losses. You're, you 10:30:40know, it's more likely to secure profits 10:30:42as soon as possible without giving the 10:30:45trade as much room to operate by using,10:30:48you know, lower time frames, right?10:30:50Because on lower time frames, the uh the 10:30:53candlesticks are a lot smaller. There 10:30:55are a lot more of them, right? it's a 10:30:57lot more likely that you're going that's 10:31:00going to hit your new stop-loss if 10:31:02you're trailing it on the one or two 10:31:03minute time frames. Okay? But if you 10:31:06want to secure profits as soon as 10:31:08possible without giving your the trade 10:31:11right room to fluctuate, um then use 10:31:14lower time frames. However, if you do 10:31:16want to like let's say you found a stock 10:31:18or crypto and you're extremely confident 10:31:21that it will continue higher, but you 10:31:24also don't want to get shaken out 10:31:26easily. Um, if you're really really 10:31:28confident that it's going to that it's 10:31:30going to continue higher, then use 10:31:32larger time frames to trail where you 10:31:35could even use the hourly or perhaps the 10:31:3715minut time frame, okay, if you're day 10:31:39trading. Okay, also let's talk about 10:31:42this um this concept here. the speed 10:31:46that it hits target matters, right? Like 10:31:49let's say you have a base breakout. You 10:31:51have a base and you're playing a base 10:31:54breakout. If this immediately pops into 10:31:57your target, right? As opposed to, you 10:32:00know, putting in a gradual move to your 10:32:02target, you're going to want to take at 10:32:04least 50% of the profits that you made 10:32:07in that trade. Right? If this 10:32:08immediately pops really fast to your 10:32:10target, you you either want to take at 10:32:13least 50% of your profits or honestly,10:32:17you might want to just take all your 10:32:19profits and don't even trail the 10:32:21position. Just take all of your profits,10:32:22right? Because quick, large, and sudden 10:32:26moves um higher could also lead to quick 10:32:29and sudden moves lower. Okay? And the 10:32:32last thing you want to do is have the 10:32:34position immediately reach target,10:32:37right? Really fast. And then you're 10:32:38like, "Oh, but you know, maybe I want to 10:32:40go for a higher target or whatever. You 10:32:43want to keep this trade because you 10:32:44think it's going to go higher." The last 10:32:46thing you want to do is get out or I'm 10:32:48sorry, the last thing you want to do is 10:32:49stay in and have this stock completely 10:32:52fail and go right back down. Okay? So,10:32:54if it's a really fast acceleration into 10:32:57your target, take profits, right? at 10:32:59least 50% of your profits. Okay? And 10:33:03understand that context matters. And 10:33:06this doesn't only apply to trailing.10:33:07This also applies to setting stop-10:33:09losses uh from the beginning of your 10:33:11trade. When determining how to manage 10:33:14your positions, make sure you look at 10:33:16how the overall stock or crypto is 10:33:19moving, right? If it's whippy or if it's 10:33:22sloppy or if there's a lot of tails,10:33:25right? whether it's bottoming tails or 10:33:26topping tails, make sure you give that 10:33:29trade more room to fluctuate. In other 10:33:32words, set a little bit larger of a 10:33:35stop-loss. Okay? And yeah, you might 10:33:38minimize your reward to risk, but at 10:33:40least you won't get shaken out. The last 10:33:42thing you want to do is get shaken out 10:33:44of a position that makes a huge move in 10:33:47your favor. And understand, guys, like I 10:33:50mentioned earlier, trading management is 10:33:52um is difficult. It's an art, not a 10:33:56science. Once the trade is working in 10:33:58your favor and it it's uh you know hit 10:34:01your target or you're making good money 10:34:03on it and you want to start managing 10:34:05that position and you know making sure 10:34:07you maximize your profits while securing 10:34:11some profits in case the trade, you 10:34:13know, ends up failing after all. Then,10:34:16you know, you got to really kind of try 10:34:17to master what works for you, what what 10:34:20trades uh trade management style works 10:34:22for you. Okay. Um, and over time of 10:34:25developing experience, like I say,10:34:26you're going to find different trading 10:34:28management strategies that work best for 10:34:30you. Every trader is different and 10:34:33unique. Okay, guys. So, hopefully this 10:34:36makes sense. All right. Uh, I'm going to 10:34:39have one last sip of my coffee. So,10:34:40cheers to you guys.10:34:45Okay, so if you're kind of confused on 10:34:48this, understand that it's normal. Okay,10:34:50this is kind of a difficult concept. So,10:34:53make sure you come to my live streams,10:34:54make sure you ask me questions on how 10:34:57you can master this. But the general 10:35:00idea here, just to give you guys an 10:35:02overall summary of what's going on, if a 10:35:05winning trade, right, hits your target,10:35:08you could either take all the profits,10:35:11right, and just take the position,10:35:12liquidate the position, take your 10:35:13profits, or you could trail the 10:35:15position, right? And by trailing, you're 10:35:17going to be raising your stop loss to 10:35:20either uh a new pivot low or maybe the 10:35:24under the lows of the new base that was 10:35:26forming. Um or perhaps you're going to 10:35:29trail it bar by bar where as soon as it 10:35:31hits target, you place your stop-loss 10:35:33under uh the most recent candlestick.10:35:36Okay? So, whichever way you do it, make 10:35:40sure uh make sure that you're kind of 10:35:42experimenting with it because you kind 10:35:44of like I said, you have to find 10:35:45something that works for you.10:35:47And last thing I want to emphasize here,10:35:49you know, last thing I definitely want 10:35:51to really I want you guys to really get 10:35:52this. If you enter a position and it 10:35:55fails and it goes against you and it 10:35:58hits your stop-loss, exit every time.10:36:01Always respect your stop loss. And if 10:36:04you're share sizing correctly, right, by 10:36:07calculating, right, risk dollar amount 10:36:09divided by the size of your stop, right,10:36:12that G that will give you your share 10:36:13size. If you're share sizing correctly 10:36:15and you're respecting your stop losses,10:36:18you're never going to lose more money 10:36:21than you intend on losing. Right? If you 10:36:23if you're the maximum amount you could 10:36:25lose is $100, then through share sizing,10:36:29through risk management and through 10:36:31following and being disciplined with 10:36:33your stop losses, you're never going to 10:36:35lose more money than you intend on 10:36:37losing. So just this should be a rule.10:36:39This should be like a golden rule. If it 10:36:42hits your stop-loss, exit the position.10:36:46Don't let it go more and more against 10:36:48you. And to do that, honestly, my 10:36:50recommendation is as soon as you place a 10:36:52trade. Don't do mental stops. Just put a 10:36:55hard physical stop into your broker into 10:36:58your exchange. Just place the order 10:37:00where you know if you buy, if you once 10:37:03you're in the position, place your sell 10:37:05stop-loss order at whatever the price it 10:37:07is. And if it hits your stop loss, the 10:37:09system, you know, your broker, your 10:37:11exchange will immediately take you out 10:37:13of the trade. In that case, you're not 10:37:15going to lose more money than you intend 10:37:16on losing, therefore limiting your 10:37:19losses. I know this was a lot of 10:37:21information. I know I'm talking a lot,10:37:22guys, but I really I understand this 10:37:24stuff is difficult. That's why I'm 10:37:25really trying to um, you know, give you 10:37:28guys enough context and really explain 10:37:30everything very thoroughly. Okay? Hope 10:37:32this makes sense. See you guys in the 10:37:34next class. In this chapter, we're going 10:37:36to combine everything that you've 10:37:38learned in this free course so far. And 10:37:40I'm going to help you build a trading 10:37:42plan. And building a plan as a trader is 10:37:46vital because as traders, we hate 10:37:48randomness. We don't like taking random 10:37:51trades with random risk, with random 10:37:53management. Everything we do needs to be 10:37:56structured and predetermined. And the 10:37:58only way to do that is to have a 10:38:00predetermined trading plan. So, let's 10:38:02not waste any time and let's help you 10:38:04build that plan.10:38:06>> What's going on, guys? Hope you're 10:38:08having a great day. We are approaching 10:38:11the end of the course and now our goal 10:38:15is to create a trading plan. Okay, every 10:38:20trader needs a plan. And this doesn't 10:38:24really only apply to trading. If you 10:38:26want to be successful in anything, you 10:38:29need to approach it in a systematic way,10:38:33you can't have random decision- making.10:38:36You have to have a plan and you have to 10:38:38execute that plan. After you execute 10:38:41that plan, you have to review it and 10:38:43refine the plan and continue forward.10:38:46Okay? Everyone's trading plan is, you 10:38:49know, everyone's trading plan evolves 10:38:51over time. All right? So today I'm going 10:38:54to be helping you create your own 10:38:56trading plan. And I'm going to be 10:38:58talking about how I created my trading 10:39:00plan back when I started trading. And 10:39:04even though I have three years of 10:39:05experience now, I make money basically 10:39:08every single day. I still don't deviate 10:39:11from my plan and I still refine my plan 10:39:14over time even though I'm already 10:39:16profitable and I'm already, you know,10:39:18experienced. So this isn't just for 10:39:20beginners. Even if you're, you know, a 10:39:22profitable trader already, you could 10:39:24still find value in this class. So,10:39:27let's go ahead and begin. So, building a 10:39:30trading plan. Why do you need a trading 10:39:33plan? So, like I said, guys, to succeed 10:39:36in any endeavor, especially trading, you 10:39:39need to have a plan. You need to have,10:39:41you know, a list of actions that you 10:39:44have to take and a, you know, a list of 10:39:46rules that govern your behavior.10:39:49And with a plan, you're going to be 10:39:52trading in a consistent and systematic 10:39:55way with no random decisions. As 10:39:57traders, we want consistent profits.10:40:01We're not going to be able to make 10:40:03consistent profits unless we're 10:40:06operating in a consistent way, right? If 10:40:09we're consistently doing the same 10:40:11things, then we're going to have some 10:40:14sort of repetitiveness in our trading.10:40:16And especially if we're doing the right 10:40:18things consistently, we're often times 10:40:21going to make money consistently. Okay?10:40:24But how can you expect to develop or or 10:40:28develop as a consistent trader,10:40:29consistently profitable trader, that is,10:40:32if you're doing random things every day?10:40:34You have to remove the randomness from 10:40:37your trading. And as soon as you remove 10:40:39that randomness and you're trading in a 10:40:43defined a predefined way, you're going 10:40:45to notice your consistency and your 10:40:47results start to improve almost 10:40:49immediately. So over time, you're going 10:40:53to be adjusting your plan based on 10:40:55what's working and you're going to 10:40:58eliminate from your plan what's not 10:41:00working. Okay? So in the beginning I 10:41:03would really suggest is start with 10:41:05conservative smaller goals and create 10:41:08strict rules. Create strict but easy to 10:41:11follow rules I should say. Right? And 10:41:14with a plan guys you're going to be 10:41:16accountable for your actions. And 10:41:19there's going to be times in your 10:41:20trading career where you go against your 10:41:23plan. It's happened to me. It's happened 10:41:25to every trader where you have developed 10:41:27the plan but then you go against it and 10:41:30you lose money or perhaps you know you 10:41:33don't do the right thing and that's 10:41:35going to be an ego hit. You're going to 10:41:37say to yourself, "Wow, why did I lose 10:41:39this money? It completely went against 10:41:42my plan. It completely went against what 10:41:44I planned for yet I still did it and I 10:41:48lost money because of it."10:41:51And you know it's going to feel bad.10:41:54You're going to have an ego hit, but 10:41:55that's a part of the journey. You're 10:41:57inevitably going to, you know, kind of 10:41:59go away from your plan and take stupid 10:42:02trades and make stupid decisions, but 10:42:04that's a part of the growth process.10:42:07But with the plan now, you're going to 10:42:10be accountable. You're going to have 10:42:11some sense of responsibility where you 10:42:13don't want to disappoint yourself and 10:42:16take trades that go against your plan 10:42:18and go against your predefined 10:42:20reasoning.10:42:22Okay? [clears throat]10:42:23So what we have to understand now is 10:42:27every trader [clears throat]10:42:29is different. Every trader must trade to 10:42:33his or her own personality.10:42:36So what that means is you could take 10 10:42:40successful traders,10:42:42put them in a room, 10 random s really 10:42:45successful traders, and if you look at 10:42:48each of their strategies,10:42:51right, and how they make money, you're 10:42:54going to notice that they all make money 10:42:56in completely different ways, right? and 10:43:00they trade 10:43:02based on what works for his or her own 10:43:06personality. Everyone is going to have a 10:43:08different style. What I like to trade,10:43:12excuse me, [clears throat]10:43:13you're probably, you know, you're 10:43:14probably not going to have an affinity 10:43:16for that sort of trading, just like what 10:43:18makes sense to you, what trading setups 10:43:20work for you and how you like to trade.10:43:22That's not going to work for me. So your 10:43:25goal through this entire learning 10:43:27process is to slowly figure out what 10:43:31works for you. What style do you want to 10:43:34adopt? It's totally okay in the 10:43:37beginning to kind of copy someone else's 10:43:38style as you're learning, but you're 10:43:41going to quickly notice that you if you 10:43:43don't resonate with someone's style,10:43:45right? It just it's the trades are not 10:43:47going to make sense to you. And you have 10:43:48to find maybe one of our analysts, find 10:43:52um what analyst style works for you,10:43:55what resonates with you, what makes 10:43:56sense for you, and start taking his 10:43:59trades. And then over time, you're going 10:44:01to be taking your own trades that work 10:44:03for you. So, play [clears throat] on to 10:44:06your individual strengths. So, let me 10:44:08give you an example. Uh and I'll give 10:44:09you my own example. When I started 10:44:12trading, I was going through the process 10:44:15of figuring out what works for me, what 10:44:17I like to trade, what's my own style.10:44:20And knowing my personality, I'm a very 10:44:22uh high energy. I'm very I don't want to 10:44:25say I'm impatient, but I'm high energy.10:44:28I don't like to lose money, right? Like 10:44:31I know losing money affects my 10:44:33psychology. Sitting and seeing myself 10:44:35losing money affects my psychology. Um,10:44:38I know that, for example, like I said,10:44:41I'm high energy. I like to I'm kind of 10:44:43like a twitchy guy. I'm always moving,10:44:46right? And I've developed a trading 10:44:48style that kind of fits my own 10:44:50personality where, excuse me,10:44:52[clears throat]10:44:53I'm less of a patient trader and I'm 10:44:55more of a scalper. I'm more I more, you 10:44:57know, kind of get in and out of 10:44:58positions. I go for quicker profits than 10:45:00most, but I do that a lot of times,10:45:03right? And you might be thinking and 10:45:05hearing uh you know myself talking about 10:45:08it and you're like oh I'm actually a 10:45:09patient person. I would never want to 10:45:11just take profits right away. Well there 10:45:13you go. Now you know what style you know 10:45:15you have to adopt. But for me that's 10:45:18what works for me and I've been able to 10:45:21I I was able to figure out that very 10:45:24early in my trading and then play on to 10:45:27my strength, right? develop that 10:45:29strength of mind because 10:45:32I'm really good in high pressure quick 10:45:34situations where other people are better 10:45:37in, you know, very low pressure, uh, you 10:45:40know, letting the trade play out over 10:45:42time, giving it the room to play out.10:45:44For me, I like to do high share size in 10:45:49high pressure environments with where 10:45:51where it's really quick in-n-out scalps,10:45:54right? quick in and out, getting in the 10:45:56trades, you know, getting in, entering 10:45:59really fast, exiting really fast. That's 10:46:00just what I prefer. It's what fits me 10:46:03and I play to that strength. So,10:46:05building a trading plan, the first thing 10:46:07you want to do, guys, we've talked about 10:46:08this before, is uh figure out your risk.10:46:10Determine your risk. Figure out what 10:46:13risk you're comfortable with losing. If 10:46:15you're a beginner, even if you're like 10:46:17an intermediate trader, re my 10:46:19recommendation is risk low amounts.10:46:22Focus on consistency. Okay?10:46:25And I can't emphasize this enough, but 10:46:27if even if you're paper trading, use the 10:46:29same risk and try to make it as 10:46:31realistic as possible. I paper traded 10:46:34for four to five months before I started 10:46:36trading with real money. But I didn't 10:46:39play a I didn't play around with paper 10:46:41trading, right? Like I didn't just treat 10:46:43it like a video game. I really tried to,10:46:47you know, go into it and paper trade as 10:46:50if it was real money. And because of 10:46:52that, you know, and when I lost paper 10:46:54trading money, I felt bad about it.10:46:56Like, you know, like I I kind of had the 10:46:58same reaction 10:47:00um as if I lost real money, right? And I 10:47:02had to force myself to really make like 10:47:06I want to think about it like it's real 10:47:09money because that will actually prepare 10:47:11me for when I'm actually trading real 10:47:13money later down the road. So, even if 10:47:15you're risking $10 to $20, right? Like 10:47:18if you're if you're just beginning, risk 10:47:20$5 a trade, $10 a trade, and that risk,10:47:23that's the maximum amount you could lose 10:47:26on that trade. Risk a low amount. $5,10:47:29$10, even a dollar. Who cares, right?10:47:31Just get just [snorts] start developing 10:47:35the right habits with low amounts of 10:47:36money. And my recommendation is paper 10:47:38trade. Okay? Paper trade. And when 10:47:42you're paper trading, they're going to 10:47:43give you like in your account since it's 10:47:45fake money, they'll probably give you 10:47:46like a million dollars to paper trade,10:47:48right? Don't use that. Like don't like 10:47:49make it realistic. Think about how much 10:47:52you're actually going to be trading with 10:47:53when you're trading with real money and 10:47:56then paper trade to that account size,10:47:59right? Like if you know you're only 10:48:01going to have a $1,000 account size when 10:48:04you're paper trading, assume you only 10:48:06have $1,000 to paper trade and practice 10:48:08realistically 10:48:10uh risking realistic amounts of money.10:48:13Like if you're make if you risk $200,000 10:48:16and you make a $100,000 on paper 10:48:19trading, you're like, "Oh, wow. I made 10:48:20$100,000." Like imagine if it was real 10:48:22money. You would have never done that if 10:48:24it was real money because with real 10:48:25money it comes risk, right? And that's 10:48:27going to affect you. You're not going to 10:48:29be risking $200,000 in a random trade,10:48:31right? So, take it seriously.10:48:34Rule, never deviate from your risk.10:48:38Never deviate from your risk. Never 10:48:41um increase your risk randomly. Never 10:48:44just if you're if you set $10 as your 10:48:46risk, don't randomly increase it to $20 10:48:49or to $30. Okay.10:48:52So, let's talk about strategy 10:48:54requirements.10:48:56You should only be trading when you when 10:48:59you see a distinct strategy that we 10:49:01learn here. Don't trade random setups.10:49:05Don't make random decisions. For each 10:49:08strategy, what you want to do is create 10:49:10a little template of requirements of 10:49:12what the stock or crypto must have. So,10:49:14here's just an example. You want to have 10:49:17the pattern. I chose the buy setup. You 10:49:20want to have a mustave and a cannot 10:49:22have. And this is just an example. Okay?10:49:25So, must have it's if it's a buy setup,10:49:27established uptrend, okay, rising 20-day 10:49:29moving average, multiple time frame 10:49:32alignment, 40 to 60% retracement. Your 10:49:35musthaves might be different than mine.10:49:37Maybe you're a lot more of a strict 10:49:38trader and you want to include all the 10:49:40other conditions we talked about for the 10:49:42buy setup, right? If you don't remember,10:49:44go back to the buy setup class. Um, but 10:49:47this is just an example. So, this is 10:49:48what you want to have. Must haves,10:49:50right? And then cannot have where if 10:49:52it's let's say there's no market 10:49:54alignment, don't trade it. If it's a 10:49:56deep or shallow pullback on the buy 10:49:58setup, don't trade it. If there's large 10:50:00amounts of resistance above the buy 10:50:02setup, meaning there's limited targets,10:50:04don't trade it. Right? So, this is a 10:50:06little template you want to have for 10:50:07every setup for the All right, guys.10:50:10Sorry, the stream actually cut off. So,10:50:12we're going to continue on here. So, the 10:50:14whole point of what we're doing here is 10:50:15we're we're creating a template where we 10:50:18have must haves and cannot haves. So 10:50:20what you do is once you have your 10:50:21template created you can go back to my 10:50:23classes to figure out the exact 10:50:25requirements. What you do is you know 10:50:28you write this either on your computer 10:50:30or on a notebook and whenever you're you 10:50:33know finding a trade let's see let's say 10:50:35you're on your charts and you see a buy 10:50:37setup right you see a buy setup or a 10:50:40potential buy setup and you go to your 10:50:42charts and you say okay does this have 10:50:44an established uptrend on multiple time 10:50:46frames. Okay it does. Check mark. Does 10:50:49this have a rising 20-day moving average 10:50:52that's trending under price? Okay, it 10:50:54does. Check mark. Does this have 10:50:56multiple time frame alignment? Do we 10:50:58have confirmation on the other time 10:51:00frames that everything looks bullish?10:51:02Okay, we do. Check mark. How's the 10:51:05retracement looking? Okay, check mark.10:51:07Very good. How's the pullback looking?10:51:10Do we have an entry bar? Check mark.10:51:12Okay, great. Do Do we have a tight 10:51:15stop-loss with good reward to risk? We 10:51:18do check mark. Okay. Does it have now 10:51:20let's see what it cannot have. Does it 10:51:23have a deep pullback? No. Do we have 10:51:26good targets or do we have bad targets?10:51:29No. We have pretty good targets. Right?10:51:31And you're going to go down the list 10:51:32like that. And if if the buy setup 10:51:35matches all of your requirements or most 10:51:38of them at least, right? Like it kind of 10:51:40depends on you how picky you want to be,10:51:44then you take the trade. And if it's a 10:51:46let's say a breakout, you do the same 10:51:48thing. You look at your template, right?10:51:50And if you're wondering what should I 10:51:52have in my must haves, what should I 10:51:54have in my cannot haves? Well, you're 10:51:56you have to look at the class, look at 10:51:58my classes and create a plan and just 10:52:01look at the requirements and make a 10:52:03template like that. Okay, so that's 10:52:05that's kind of the work that you guys 10:52:07have to do. Let's talk about entry 10:52:09requirements. Um, only enter a trade 10:52:12that has a distinct entry point based 10:52:14off what strategy you're trading, right?10:52:16If it's a buy setup, you know where the 10:52:18entry is. It's above the entry bar. If 10:52:20it's a breakout, it's above the highs of 10:52:22the base. If it's a climactic move, then 10:52:25you know it it's above or below the 10:52:27entry bar, right? So, make sure you have 10:52:28a distinct entry and maybe put that in 10:52:31your trading plan. I I have to have a 10:52:33distinct distinct entry. I'm not 10:52:35entering randomly. I have a distinct 10:52:37entry. Place a stop loss exactly where 10:52:40you should for the strategy you're 10:52:41playing, right? You know where to set 10:52:43your stop losses for each strategy. Make 10:52:45sure you have an exact price that you're 10:52:46setting it. It's not random, okay? It's 10:52:49distinct. You know what price you you 10:52:51put it into the system, right? You're 10:52:53setting your stop losses in the system.10:52:55If it hits that stop loss, you're you're 10:52:57out of the trade. No questions ask 10:53:00asked, right? And you can make that a 10:53:02rule where if it hits your stop loss,10:53:04you're out of the position, right?10:53:06You're not going to allow it to go 10:53:08against you more than where you placed 10:53:11your stop loss. Right? If it approaches 10:53:14target, you look to take profits or you 10:53:16trail the position. Right? So, building 10:53:19a trading plan. Let's talk about 10:53:20protecting profits. So, this is a really 10:53:24important idea. And this, you know, I've 10:53:28seen successful traders completely lose 10:53:31their confidence and lose their mojo 10:53:34just because they failed to do this. Let 10:53:37me let me give you an example, right?10:53:40Let's say I make I made $1,000 on the 10:53:43day or you let's say you made $1,000,10:53:47right? So you're up $1,000. You have to 10:53:50ask yourself, how much am I willing to 10:53:54risk now? Right? Like if you you're 10:53:56already $1,000 in the profit, are you 10:53:58willing to lose all of that $1,000 where 10:54:02you're going to end up finishing with 10:54:03zero? Like you want to protect some of 10:54:06the money you made on the day, right? So 10:54:08let's say you have $1,000 and you say to 10:54:10yourself, "Okay, I want to protect at 10:54:13least 800.10:54:15I can't lose I can't, you know,10:54:19lose more than $200 on this trade. I ha 10:54:21I have to protect 800." Right? If you're 10:54:24at a,000, I have to protect $800. I'm 10:54:26not willing to lose 10:54:29um more than $200. Okay? Because 1,000 10:54:32minus 200 is 800. Okay? So, in that 10:54:37case, that'll be your that you put that 10:54:38in your plan, right? You're not you have 10:54:41to protect 80% of the profits you made 10:54:44on the day once you hit a certain target 10:54:47or something. So, if you risk $50 per 10:54:50trade,10:54:51$50 is one risk unit or one R. So, one 10:54:55risk unit is whatever your maximum risk 10:54:58is. That's one R. In this case, it's 10:55:00$50. Remember, we talked about that we 10:55:03always want to have 2:1 reward to risk.10:55:05In other words, two two Rs to one R or a 10:55:09$100 profit at least for $50 risk.10:55:13So, per here's one strategy you could 10:55:15do. If you're up five Rs in the day, you 10:55:18have to protect at least four Rs. In 10:55:20other words, if you're up $250 in the 10:55:22day, right? Because five * R, one R is 10:55:26$50. That's $250. You must protect four 10:55:30Rs, which is 4 * 50 is 200. So, you have 10:55:34to protect $200. If you made 250, this 10:55:37is one strategy. And let's say you're in 10:55:39an open position. You're in an open 10:55:41trade and you are up two Rs. you have to 10:55:44either trail to break even or trail to 10:55:47secure some profit with the management 10:55:50strategies we've already discussed. So 10:55:52the whole point of this is let's say you 10:55:55know it hits your target you're up 10:55:56already two Rs on the position which is 10:55:59you know that's what we want. We want at 10:56:00least two to one reward to risk. You 10:56:03can't lose money on that trade. either 10:56:05trail it to break even or trail it in a 10:56:08way where you could secure 100% some 10:56:11profits, right, with the management 10:56:13strategies that we've discussed or just 10:56:14take profits completely, right? It 10:56:16depends on you.10:56:18So, let's talk about some rules that you 10:56:20have in your trading plan. At the end of 10:56:22the day, guys,10:56:24it's all about the rules. It's all about 10:56:26the discipline, right? It's all about 10:56:28following these rules, staying 10:56:30disciplined, okay? That's that's you 10:56:34know and each rule everyone's uh list of 10:56:36rules is going to be different based on 10:56:40your own psychological flaws. You have 10:56:42to figure out what is standing in the 10:56:44way of your trading from really taking 10:56:46the next step. What psychological flaw 10:56:48specifically and then create rules 10:56:51addressing that flaw. So I kind of 10:56:54listed a whole list of examples. So, if 10:56:58you lose X number of consecutive trades,10:57:01you step away or lower your risk. If you 10:57:04lose five trades in a row, lower your 10:57:06risk from $50 to $25 until you gain your 10:57:10confidence back or just step away from 10:57:12trading completely for the day. If you 10:57:15lose four Rs after being up five hours,10:57:17stop trading for the day. So, let's go 10:57:19back to this example.10:57:22Let's say you're [clears throat] up 250.10:57:24If all of a sudden you lose four hours,10:57:26so you lose $200 and now you're only up 10:57:28$50 on the day, you lost four hours,10:57:31step away. Okay? You don't want to 10:57:34snowball 10:57:36the losing. I think a lot of 10:57:39traders um actually I'm going to make 10:57:41this point after we get through all the 10:57:43rules real quick because it's kind of an 10:57:45important one. But so predefine your 10:57:47risk and reward for each trade. Before 10:57:49you enter each trade, make sure you know 10:57:51what your risk is, where the stop loss 10:57:53is, where the entry is, what your 10:57:55target, what target you're looking for,10:57:57and make sure it's predefined. You know 10:57:59the exact price is of your target, your 10:58:02entry, and your stop loss.10:58:05Another [clears throat] rule, and this 10:58:06is more of like a guideline, you you're 10:58:08trading to acquire skill, not to make 10:58:11money. Okay? Don't worry about the 10:58:14money. Worry about you acquiring the 10:58:16skill. If you focus on acquiring the 10:58:18skill, the money will come. I promise 10:58:22you. I can guarantee you. If you're 10:58:25focusing on the skills and learning how 10:58:29to become the best trader you can, the 10:58:32money will come. I guarantee you. And it 10:58:35will come in spades. Okay? You will make 10:58:38a ton of money. The fact is trading is 10:58:41not a linear process. Success is often 10:58:44not a linear process.10:58:47Right? You're usually kind of I can't 10:58:49really draw it but you know usually your 10:58:52success is kind of flat flat flat until 10:58:55it goes exponential.10:58:58Okay? So just focus on developing 10:59:02consistency. Focus on becoming a better 10:59:05trader. I promise you the money will 10:59:08come and a lot of it will come as well.10:59:11If you feel emotionally compromised,10:59:13step away and lower your risk. If you're 10:59:15trading and you're and you start to feel 10:59:17that you're trading off emotion, step 10:59:19away. Okay, that's that's a big rule for 10:59:22mine for me. Don't make random 10:59:24decisions. Every decision should happen 10:59:26for a reason that you can justify. Okay?10:59:30Don't have any outside beliefs. You only 10:59:32listen what the charts are telling you.10:59:34That's a big point. I'm probably going 10:59:35to make a separate class on that. Uh 10:59:38just to listen what the charts are 10:59:39telling you. Understand, like I said,10:59:42you guys are going to have different 10:59:43rules based on your psychological flaws.10:59:45Every trader is going to have different 10:59:46rules. You have to figure out what set 10:59:49of rules fits you. Okay? So, that's 10:59:52really key. Okay? And guys, you have to 10:59:56understand that in the beginning,10:59:59don't be focusing on creating a perfect 11:00:01trading plan. There's no such thing.11:00:04Your plan is inevitably going to evolve 11:00:07over time. So, what your goal is is 11:00:11create a plan, right? First, uh 11:00:14determine your risk. Then make a little 11:00:17template like this for every trading 11:00:19strategy you're looking to play. Then 11:00:22create some management rules, right?11:00:24When are you going to take profits,11:00:26right? How much profits are you willing 11:00:27to get to to uh sacrifice if you're 11:00:30trade, right? Uh how are you going to 11:00:33protect your profits, right? All this 11:00:35stuff. Create a plan in the beginning.11:00:37Make it simple, right? Just make a 11:00:39beginner's plan.11:00:42Then execute. Go in for two to three 11:00:45days or 4 days, maybe a week. Execute 11:00:47that plan. Record every single trade you 11:00:51take.11:00:53And at the end of the week, you're going 11:00:54to go back and review every single trade 11:00:58that you took. Or maybe you could do 11:00:59this on a daily basis as well. review 11:01:01every single trade that you take and see 11:01:05what's what's where are my mistakes,11:01:07right? Where do I need to improve? What 11:01:10am I really actually doing wrong? Right?11:01:13And if it's a question on, okay, I'm 11:01:14taking bad setups,11:01:17then review and be like, okay, what 11:01:18makes this a bad setup? What would a 11:01:20manual say? Right? And if you're 11:01:22confused, that's what the live streams 11:01:23are for. Come to my live streams and ask 11:01:25me questions, right? And you're I'm sure 11:01:28you could probably I could help you a 11:01:30lot with evol helping you evolve your 11:01:32trading plan, right? And after you refi 11:01:36after you review, right? You're seeing 11:01:38what you're doing wrong, you refine. You 11:01:40fix up your plan. You change your plan.11:01:42You make some adjustments. And then what 11:01:44do you do? The next week or the next 11:01:46day,11:01:48you execute again. Then you review. Then 11:01:50you refine. Then you execute again. You 11:01:53review. You refine. And this is a 11:01:54process that will take time. And you're 11:01:58going to notice all of your negative 11:02:00habits from your trading are slowly 11:02:03going to go away. And guys, in trading,11:02:07it's really about it. It's not about 11:02:10what you are doing in trading. A lot of 11:02:12the times it's about what you're not 11:02:14doing in trading, what you don't do in 11:02:16trading, right? Like if you minimize all 11:02:20of your stupid mistakes, all of your 11:02:22psychological flaws that are leading to 11:02:24unnecessary unnecessary losses, if you 11:02:27eliminate all the garbage that you do in 11:02:29your trading, right, you're going to 11:02:33become more profitable.11:02:35Like for me guys, personally, when I was 11:02:38first starting out, my number one goal 11:02:40wasn't to make money. It was just to 11:02:42figure out what I shouldn't be doing.11:02:44What should I not? what should I stay 11:02:46away from in trading? And once you 11:02:49understand what you should stay away 11:02:51from in trading and what setups to stay 11:02:53away from, what charts to stay away 11:02:55from, right? What maybe psychological 11:02:59mindsets you should stay away from,11:03:02right? Once you know what not to do,11:03:05it's really easy to flourish and what 11:03:10you know you're supposed to do, if that 11:03:12makes sense. Just focus on what not to 11:03:14do. eliminate all the stupid garbage 11:03:16from your trading and you're going to 11:03:17see your trading go to the next level.11:03:19Okay, that's really it for the 11:03:20presentation, guys. Just understand that 11:03:23this is an evolving plan. And I think we 11:03:26talked about I mean guys, just go step 11:03:28by step here. Follow everything. Um I 11:03:30really want to emphasize that at the end 11:03:33of the day, everyone's different, okay?11:03:36Everyone is completely different.11:03:39Your [snorts] your your plan is going to 11:03:41be different from someone else's plan.11:03:43But always create a plan. Do not 11:03:44procrastinate. Put it pen to paper.11:03:46Write it down and think it through. Stop 11:03:50trading randomly. Make this plan and 11:03:54execute off your plan. Okay? Don't 11:03:57procrastinate. Write it. If after this 11:03:59class, take out a a piece of pens, a 11:04:01piece of a notebook, get a pencil or 11:04:03pen, write down your plan. Okay? And 11:04:07once you do that, you're ahead of the 11:04:1095% of traders, the 95% of all the 11:04:14amateurs who don't know what they're 11:04:16doing. You're going to be ahead of them 11:04:18because none of those guys have a plan.11:04:21They're trading randomly. They are 11:04:23effectively gambling like at the casino.11:04:25Why? Cuz they're not doing anything 11:04:28consistently. They don't have a plan of 11:04:30execution. They just do randomness. And 11:04:33I can guarantee you if you're just going 11:04:35to be a random individual, a random 11:04:37trader, you're not going to ever 11:04:39consistently make money, which is the 11:04:40goal. All right, guys. Hope this makes 11:04:42sense. Please come to my streams if you 11:04:44have any questions.11:04:46See you later, guys. I'm going to teach 11:04:47you how to build a trading plan so 11:04:49strong that you have no choice but to 11:04:52become profitable. And I guarantee that 11:04:5490% of the people that are watching this 11:04:57video right now, and yes, that includes 11:04:59you, are approaching the markets 11:05:02randomly. Random setups, random 11:05:04strategies, random management, random 11:05:07execution. And the funny thing about 11:05:08that is you have random input, but 11:05:11you're expecting consistent results. It 11:05:14makes absolutely no sense. And by the 11:05:16end of this video, I'm going to teach 11:05:17you how to build a trading plan 11:05:19specifically tailored to you so you 11:05:22could 2x, 3x, even 5x your trading 11:05:25profits. And it doesn't matter if you're 11:05:27trading on a small account or a large 11:05:29account or what market you trade in. It 11:05:31doesn't matter if you trade stocks,11:05:33options, futures, crypto, forex. This 11:05:37video is going to save you hundreds of 11:05:38hours. And if you actually apply what 11:05:41I'm teaching you, it could dramatically 11:05:44increase the amount of money that you're 11:05:46making in your trading. And before we 11:05:48get into the video, I want to go ahead 11:05:49and introduce myself to anyone who is 11:05:52new to me or new to the channel. My name 11:05:54is Emanuel Malurovich and 5 years ago my 11:05:57father taught me how to trade. He was my 11:06:00mentor and without him I would not be 11:06:03where I am today. And in fact, this 11:06:05picture was literally day one of him 11:06:08teaching me how to trade. My mom took 11:06:10this. This is where it all started. And 11:06:13if you want more information about our 11:06:16journey um obviously from my perspective 11:06:18from but also from my dad's persuh 11:06:20perspective and if you want to know my 11:06:22dad's journey as well I created a 11:06:24YouTube interview video with my dad 11:06:27where he details everything you know 11:06:29what he had to go through to become 11:06:31profitable and of course how he taught 11:06:33me. So after you're watching this video 11:06:35I would highly recommend watching this 11:06:37one. It's on the same channel so 11:06:40definitely check that out. And here are 11:06:42my last five months of trading 11:06:44statements. And the reason I'm showing 11:06:46you this is to be as transparent and as 11:06:48real as possible. I use Charles Schwab.11:06:51That's my brokerage account. And I use 11:06:53Think or Swim platform. I want to show 11:06:56you that I actually make money doing 11:06:57this. That everything I'm going to be 11:06:59teaching you today, I actually implement 11:07:01within my own trading to make money.11:07:03This is what I do full-time. This is my 11:07:05career. This is how I make a living. And 11:07:07I trade live every single day. So, in 11:07:11this statement, you'll see my deposits.11:07:12I didn't make any deposits. You'll be 11:07:14able to see my withdrawals, my beginning 11:07:16balance, ending balance, cash activity,11:07:19all that good stuff. In November, I made 11:07:21$77,571.11:07:24December, I made a little bit over 53K.11:07:27January, I made 73K uh and then $656.11:07:31February, I made a little bit under 11:07:33$69,000. And in March, I made a little 11:07:35bit under 44,000. And it is currently 11:07:37April 27th. I'm going to have my April 11:07:40statement uh ready for next video next 11:07:43month once that statement is prepared.11:07:45But I think I'm up a little bit over 11:07:47$57,000 for the month of April.11:07:49Hopefully a little bit more. There's 11:07:50still a couple more trading days. And by 11:07:52the way, I post my profits every single 11:07:55day on my Instagram, M Trades, and I 11:07:57give you kind of like a sneak peek of my 11:08:00life as a trader. And I try to be really 11:08:02transparent. So definitely follow up on 11:08:05my Instagram if you want to know kind of 11:08:06day-to-day what I'm doing as a trader 11:08:08and how much I am making. But let's go 11:08:10ahead and jump right into the video. I 11:08:13want to keep this video around 20 11:08:15minutes long or so. So I have a shot 11:08:16clock, 20 minutes on the clock. Let's 11:08:18get this going. Build a trading plan so 11:08:21strong it's impossible to lose. And when 11:08:24I say it's impossible to lose, I'm not 11:08:26talking about that you're not going to 11:08:28have any losing trades. Losing is 11:08:30inevitable in trading. It's a part of 11:08:32the profession. You're going to have 11:08:34losing trades. All of the best traders 11:08:36have losing trades. But I'm talking 11:08:37about impossible to lose longterm. To 11:08:41build a plan, to build a system that can 11:08:44make you money in one year, in 5 years,11:08:47in 10 years, and you need a plan in 11:08:49order to do this. And it blows my mind 11:08:51how many beginner traders don't put any 11:08:54attention to building a profitable plan.11:08:59every serious profession where money and 11:09:02risk are involved, a plan is required, a 11:09:05pretty intricate plan, right? Why would 11:09:07trading be any different? I mean, think 11:09:09about it. If you're an entrepreneur, if 11:09:12you're a, you know, business owner, you 11:09:14create a business plan, right? You have 11:09:17a marketing plan, marketing budget, you 11:09:19know exactly how much you're going to be 11:09:21playing uh paying your employees. You 11:09:23have a strategy for how you're going to 11:09:25scale your business, right? You can't,11:09:27you know, start a business and expect to 11:09:29make money without a plan. Trading 11:09:31without a plan is like starting a 11:09:33business with no idea how you'll make 11:09:35any money. It doesn't make any sense. If 11:09:37you're starting a business, you need a 11:09:38plan. If you're going to be a trader,11:09:40you need a plan. Um, pilots have a 11:09:43flight plan, right? When you go on a 11:09:46plane, you're not hoping, oh, I hope my 11:09:48pilot just flies in hopes that he lands,11:09:51you know, at the right spot. No, they 11:09:52have a clear flight plan on how they're 11:09:54going to fly, what altitude, whether 11:09:56there's going to be crazy weather 11:09:58conditions, you know what I mean? If 11:09:59there's going to be a storm. And trading 11:10:01without a plan is like literally flying 11:10:03without a blindfold. It sounds 11:10:05ridiculous, right? But trading without a 11:10:07plan is also ridiculous. Next, engineers 11:10:10and architects create blueprints, right?11:10:13Before they even start constructing the 11:10:15building, they have every single detail 11:10:18completely planned, right? Because 11:10:20without that, well, the building would 11:10:22inevitably collapse or it wouldn't be 11:10:23properly built. A lack of a trading plan 11:10:26in that sense could lead to an emotional 11:10:28collapse. Just like not having a plan if 11:10:31you're constructing a building could 11:10:33lead to the building collapsing, right?11:10:35Does that make sense? We need a plan.11:10:37This is something that you need to be 11:10:38focusing on right now. It's extremely 11:10:42important because your job isn't to 11:10:44trade. Your job is to follow your 11:10:48trading system. And your trading system 11:10:51is built through time and experience.11:10:53And I'm going to show you how to build 11:10:54one literally today. So let's go ahead 11:10:56and literally create a trading plan 11:10:59together. So what goes into creating a 11:11:02trading plan? What's the first step? So 11:11:06number one, strategy requirements. What 11:11:10is your edge? What strategies or setups 11:11:13are you trading? What is your 11:11:15methodology? And I'm going to be going 11:11:17over a strategy today, but I highly 11:11:19recommend watching my free 10 plus hour 11:11:22course. If you don't have any strategies 11:11:24or you don't have a methodology or you 11:11:26don't have a foundation behind your 11:11:28trading, my free course, it's in the 11:11:29description of this video. It's 11:11:31genuinely better than most paid courses 11:11:33on the internet. So, you could use the 11:11:35free course uh in conjunction with this 11:11:37video. But what should your strategy 11:11:40actually have? Right? So number one, you 11:11:42cannot trade random setups, right?11:11:45That's not what we do as traders.11:11:47Nothing in our trading should be random 11:11:49because guess what? Random actions lead 11:11:53to random results. And we don't want 11:11:57random results. We want to be 11:11:59consistently making money with trading.11:12:02You're only as profitable as you are 11:12:03consistent. So in order to get 11:12:05consistent results, you need to have 11:12:07consistent actions, consistent input.11:12:10And in order to have consistent input,11:12:12you need a plan, right? So what is your 11:12:14edge? You have to think about that. Like 11:12:16what's your methodology? Why are your 11:12:19strategies going to work over the long 11:12:21run? They need to be defined. They need 11:12:23they need to be repeatable. They need to 11:12:25be identifiable. So when you look at a 11:12:27chart, you know what you're seeing. And 11:12:28the same setups will make you money over 11:12:31the long run. And you need to have a 11:12:32template of the requirements that you 11:12:35that you need, the criteria that you 11:12:37need to see for a trade. Right? There 11:12:40are lowquality setups and there are 11:12:42highquality setups. There are specific 11:12:45criteria that make a setup highquality 11:12:48and then there are also or I should say 11:12:50a lack of criteria that make a 11:12:52lowquality setup lowquality. You need to 11:12:55you need to know all this criteria. You 11:12:57need to know what specifically goes into 11:13:00a highquality setup. And we're going to 11:13:02do that right now. Right? We're going to 11:13:04do a little bit of a sample little plan.11:13:07All right. So, what we're going to be 11:13:09talking about is a buy, setup, and 11:13:12retracement. That's the strategy, right?11:13:14So, in your plan, you have the strategy 11:13:17listed. And then you want to have a 11:13:19template of the criteria that you need 11:13:21to see in that setup, the criteria that 11:13:24you would like to see in that setup, and 11:13:27specific cannot haves, which will 11:13:29literally um restrict you from doing the 11:13:32trade in the first place. So, what is a 11:13:34buy setup? That's like a retracement 11:13:36pattern, right? A buy setup is it's kind 11:13:39of like buying the dip, right? It moves 11:13:41up and it retraces. It's one of the most 11:13:45simple strategies out there and it's 11:13:47actually one of my primary strategies. I 11:13:49keep my trading extremely simple. I 11:13:51don't have fancy strategies. I don't 11:13:53have fancy, oh well, you know, the 11:13:55liquidity divergence on the 15 ICT time 11:13:58frame creates uh an RSI uh Ballinger 11:14:01band speculation. Like I I keep I keep 11:14:04it simple. I use like two moving 11:14:05averages and that's it. All right. So,11:14:08buy setup, retracement, buy the dip type 11:14:11of setup. That's what we're talking 11:14:12about. So, mustave. What do I need to 11:14:15have in my buy setup? And by the way, as 11:14:17we're constructing this plan here, you 11:14:20don't need to have everything that I 11:14:22have, right? This is just an example.11:14:24You can move bits and pieces around 11:14:26based on your own psychology, based on 11:14:29your own preferences, based on your 11:14:31style. This is just a framework on how 11:14:33to create your plan, right? So, you 11:14:35don't need to copy me. You can take what 11:14:38I'm doing and apply it in your own way 11:14:40to your own system. So, for me, in order 11:14:42to trade a buy setup or a retracement, I 11:14:45need to have a rising 20 MA and I need 11:14:48to have an entry bar. Now, I have here 11:14:51kind of a diagram of a really almost 11:14:53picture perfect buy setup or retracement 11:14:56pattern. By the way, I teach all of this 11:14:58in my free course. So this if this is 11:15:00confusing I would watch the free course.11:15:02This is going to teach you all these 11:15:04criteria that I'm about to talk about.11:15:06So rising 20 MA requirement. I have the 11:15:08rising 20 period moving average under 11:15:10price trending higher. Check entry bar.11:15:13For my entry bars I either want a dogey 11:15:16bar or a narrow range bar. Those are 11:15:18kind of like my requirements for the 11:15:20setup. I must have these two in order 11:15:21for me to take the trade. I need three 11:15:24or more consecutive red bars in a row on 11:15:26the retracement. So, red bar, red bar,11:15:28red bar, red bar, or red bar, red bar,11:15:31red bar, green bar, three in a row, or 11:15:33four in a row. What I don't want to see 11:15:35is red bar, green bar, red bar, green 11:15:37bar, red bar, green bar. I don't want to 11:15:39see Christmas lights. I want to see 11:15:40consecutive red bars in a row. I need to 11:15:43see that. That's a part of my mustave.11:15:4540 to 60% retracement. So, prices moved 11:15:49up and then we got a 40 to 60%11:15:51retracement, which is like between 11:15:53probably here and here. So, did we 11:15:55retrace into this 40 to 60% area? I call 11:15:58this the golden zone, the golden 11:16:00retracement zone, right? 40 to 60%11:16:03retracement is great because um if it's 11:16:06over 60% of a retracement, well, it's a 11:16:08little bit too weak. Why would we 11:16:10retrace over 60% if this was actually 11:16:14bullish and if this was a legitimate 11:16:15uptrend? And if it's below 40%, let's 11:16:18say it only retraces like 10 or 20%,11:16:20well, it hasn't corrected enough. We 11:16:22need to see more of a dip before I'm 11:16:24going to be interested in playing the 11:16:26uptrend or playing the buy setup. Right?11:16:29So, there's like a golden zone 40 to 11:16:3160%. I need to see that. I don't want to 11:16:33see deep retracements. I don't want to 11:16:35see shallow retracements. So, these are 11:16:37my must haves. Next, uh I want to see an 11:16:40interesting overnight gap, right? I 11:16:42trade gapping stocks. I trade stocks 11:16:44that had overnight changes in price. I 11:16:46have another video that's explaining 11:16:47that. So, I would watch my morning 11:16:50routine video and I would watch the uh 11:16:52my boring strategy that makes me 50k a 11:16:54month video. Those will kind of go into 11:16:55in overnight gaps and how they work. I 11:16:58also want to see two to one reward to 11:16:59risk. I need to have two to one reward 11:17:01uh R to R. If I risk $100 on the trade,11:17:04I need to be at least making $200,11:17:07right? So, what are these must haves?11:17:10These are criteria that I need to have 11:17:14for me to trade this setup. If I don't 11:17:16have these musthaves, I don't trade the 11:17:19setup. That's, you know, what's great 11:17:22about having a plan because I know what 11:17:24I'm looking for. Like, it's obviously 11:17:26it's in my mind, but I can even write it 11:17:27down. I know exactly what I'm looking 11:17:29for. So, when I see a setup, I can look,11:17:31hey, does this fit my must haves? And if 11:17:33it does, great. If it doesn't, then I 11:17:35can't take the trade. Now, I also have 11:17:38would like to have retracement into 11:17:41minor support. This is like when you 11:17:43have an uptrend and the previous high um 11:17:48becomes support for the next pullback.11:17:50Right? So, I'm going to see if I can 11:17:52kind of draw this here. Uh pen. All 11:17:55right. The pen is kind of So, right. So,11:17:58it's kind of thin, but let's say you 11:18:00have an uptrend like this. You get a 11:18:02pullback. Do you get another move 11:18:04higher? And then you get a pullback 11:18:06where this pullback 11:18:09essentially pulls back into this 11:18:11previous high. So all of a sudden this 11:18:13prior resistance becomes what's called 11:18:15minor support for the stock. And this is 11:18:18where we would want to go long, right?11:18:20So I'm not going to go too deep into 11:18:21that, but that is um minor that's a 11:18:25retracement into minor support. I would 11:18:27like to have 3:1 reward to risk. I would 11:18:29honestly like to have four, five reward 11:18:31to risk, but my musthaves says I need at 11:18:34least 2:1, but I'd like to have 3:1 or 11:18:364:1 or 5:1. Right? Volume requirement.11:18:39we tend to want to see a volume spike on 11:18:42the actual uh trigger of the buy setup.11:18:45So when when this candlestick finishes 11:18:48or when this candle takes out the entry,11:18:50right, which is over the highs of this 11:18:52entry bar, I want to see a volume spike.11:18:54They're showing that the buyers are 11:18:56stepping up to the plate and uh buying 11:18:58this stock. All right. Um I also want to 11:19:01see market alignment, relative strength 11:19:03to the market. I love to see when the 11:19:05market is dropping, I love to see stocks 11:19:08that are basing at the highs or or are 11:19:10within an uptrend because then it's 11:19:12showing relative strength to what the 11:19:14market is doing, right? The market's 11:19:15pulling back, but this stock is holding 11:19:18strong within its uptrend and it looks,11:19:20you know, it's showing relative 11:19:22strength, right? There's something 11:19:23unique about that stock that's causing 11:19:25it to not drop with the market. I'd love 11:19:28to see that. or market alignment where 11:19:30let's say the market is pulling back uh 11:19:33getting ready for a buy setup 11:19:35retracement pattern. Maybe the market is 11:19:36at this point right here before it 11:19:38continues higher. I can time my entry 11:19:41into the stock that I want to trade with 11:19:44the market triggering higher with the 11:19:46market triggering on the buy setup.11:19:48Right? I also ideally want to see a 11:19:50readable level two which is orderflow.11:19:52Not going to go too deep into that but 11:19:53ideally I want to see a really good um 11:19:56level two. All right. cannot have I 11:19:59can't have conflict within the time 11:20:00frames, right? I can't have the five 11:20:03minute chart look in a downtrend,11:20:0515-minute in an uptrend, hourly is 11:20:07sideways, daily is bearish, right?11:20:10There's no um alignment among time 11:20:12frames. If there's conflict between time 11:20:14frames, I don't take the trade literally 11:20:17ever. All right? So, very very 11:20:19important. Next, I don't want it to be 11:20:20sloppy and I don't want it to have high 11:20:23spread, right? No. So, I no high spread,11:20:26no sloppiness. And if it's under 2 to1 11:20:28reward to risk, I do not take the trade.11:20:31So, this is a really good framework of 11:20:33what I look for in a buy setup. And here 11:20:35are some really good examples of buy 11:20:37setups. Right? We moved up 40 to 60%11:20:40retracement, a bunch of entry bars, 2 11:20:42to1 reward to risk, entry above the 11:20:45highs here, stop loss here. Right? What 11:20:47other criteria does this match? Um the 11:20:50overnight gap, there wasn't interesting 11:20:52overnight gap. Uh we [snorts] got three 11:20:54consecutive red bars in a We did have 11:20:56one green bar, but that's not too big of 11:20:57a deal. And of course, we have the 11:20:59rising 20 period moving average 11:21:00requirement. Perfect. Next, right here,11:21:03we moved up. We kind of retraced into 11:21:06the rising 20 period moving average.11:21:08Beautiful uh uh follow through pullback 11:21:1140 to 60% retracement. Entry bars right 11:21:13into the rising 20 MA entry over these 11:21:16entry bars. Stop loss blow. Maybe this 11:21:17didn't have quite 2:1, but you guys get 11:21:19the idea. These are really good setups 11:21:21based off the criteria that I like to 11:21:23see for a retracement pattern. This is 11:21:26just a sample of what you can do. Next,11:21:29the next criteria within a trading plan 11:21:32is determine your risk. What is your 11:21:34risk? That is the maximum amount that 11:21:38you could lose on a trade. That is your 11:21:41risk. You don't lose more than your 11:21:44predetermined risk. And that's the 11:21:46important word here or two words 11:21:49predetermined.11:21:51You're you don't like guess what your 11:21:53risk is going to be when you enter a 11:21:54trade. You know the worst possible 11:21:58outcome of that trade before you get 11:22:00into it because you know what you're 11:22:02risking, right? So what risk are you 11:22:05comfortable with losing? You have to 11:22:06pick an amount where you're comfortable 11:22:10with losing it. It's not going to affect 11:22:12you emotionally or psychologically, but 11:22:14it's also not low enough where it's like 11:22:16you're you don't even care. Like if I 11:22:17risk $10 on a trade, I don't I don't 11:22:19care. But if I risk 500, which is what I 11:22:21do, 500 to 600 bucks on a trade, it's 11:22:23not going to really impact me if I lose 11:22:25it, but I I'll feel it, right? Like it's 11:22:27it's not high enough where it's going to 11:22:29affect me, but it's not low enough where 11:22:30I don't I'm going to dismiss it. All 11:22:32right. Before you enter a trade, you 11:22:34have to accept the risk that that trade 11:22:38may not work out. Very important. You 11:22:40always have to accept the risk, right?11:22:41Cuz losing in trading isn't is 11:22:43inevitable. It's not about being right 11:22:45or wrong. It's about having high 11:22:47probability strategies and then over the 11:22:50long run, if you take enough of those 11:22:52high probability strategies, even though 11:22:54some of them are going to lose you 11:22:55money, over the long run, it'll 11:22:57ultimately make you money, right, with a 11:23:00large enough sample size. But in order 11:23:02to do that, you have to accept the risk 11:23:03that you take on every trade. You're 11:23:05okay with losing the amount that you're 11:23:06risking. If you're paper trading, I 11:23:09recommend risking the same amount that 11:23:10you would use with real money just to 11:23:12keep it as realistic as possible. And if 11:23:15you're a beginner, risk one to $10 per 11:23:18trade. Risk extremely small amounts 11:23:21because guess what? If you can't be 11:23:23consistently profitable risking small 11:23:26amounts, you're not going to be 11:23:27profitable risking large amounts.11:23:29Develop consistency. Develop your feel,11:23:32your intuition on small risk. So even if 11:23:35you make mistakes, even if you 11:23:37experiment, even if things go wrong,11:23:39you're not losing a ton of money, uh 11:23:41focus on the consistency. And then once 11:23:43you're noticing that you're becoming 11:23:44consistently profitable, everything is 11:23:46coming together, that's when you can 11:23:47begin to scale your risk. All right,11:23:51next guys. So trade management. So a lot 11:23:55of people, you know, they think that 11:23:57getting into the trade is the most 11:23:58important part. That is not the case.11:24:01That's like literally 25% of the battle.11:24:03the other 75% of the battle is managing,11:24:07you know, your while you're in the 11:24:10trade. That's the entire thing. Like 11:24:12your intrade management is what's most 11:24:14important to make sure you extract as 11:24:16much value from that trade as possible 11:24:19while keeping your downside relatively 11:24:22low. All right? So, you need to know how 11:24:25you're going to manage the trade before 11:24:27you even enter it. You need to know when 11:24:30are you going to take profits? Do you 11:24:32have a specific target? How much profits 11:24:35are you actually taking? Are you going 11:24:37to leave a runner on the position? Are 11:24:40you raising your stop loss at any point 11:24:42to break even or to a specific point on 11:24:44the chart? If so, when are you going to 11:24:46do that? Like, if you hit a certain 11:24:48reward to risk, if you're up two to 11:24:50three Rs on your position, are you going 11:24:52to raise your stop-loss? How much 11:24:54profits are you going to take out?11:24:56Right? If you hit two to three Rs, are 11:24:58you going to take out 100% of your 11:24:59profits or 50% of your profits? Right?11:25:02All of these trade management concepts 11:25:05you need to have predefined,11:25:08predetermined within your trading plan.11:25:10So, when you're in the trade, you don't 11:25:12need to guess how am I going to manage 11:25:14this trade, when do I exit, when do I 11:25:15raise my stop loss, uh uh how do I 11:25:17manage? You don't do that. You know 11:25:19exactly what you're going to do before 11:25:22you even take the trade. Now, as you 11:25:25become more and more experienced, this 11:25:27is going to become more and more 11:25:29discretionary where you can literally 11:25:31make um like in the- moment type of 11:25:34decision where you're managing a 11:25:35specific trade and you can make an 11:25:37impulsive decision based on the 11:25:39management right now. That's once you 11:25:42have experience, you can kind of do it 11:25:44on the fly. Like myself, like I have a 11:25:46trading plan that I do, but a lot of my 11:25:49decisions are discretionary. But in the 11:25:51beginning, you have to keep it 11:25:52systematic. I'd recommend writing on a 11:25:54piece of paper and then once you get a 11:25:56feel, once you develop intuition and 11:25:58experience, you can go more 11:25:59discretionary and you'll know your 11:26:01style. You know, you'll know what 11:26:03psychologically you like to do, right?11:26:05So, let's create a little bit of a 11:26:08sample trading plan here for you guys.11:26:10So, you guys know 11:26:12um you know, you guys know the structure 11:26:14of what to actually do. We're kind of 11:26:16running low on time here. We're at two 11:26:18minutes, but whatever. We're going to 11:26:19make this video a little bit longer for 11:26:20you guys. So, if you're below 2:1 reward 11:26:25to risk on the position, you're going to 11:26:27stick with your original stop-loss,11:26:29right? So, let's say you get into the 11:26:30trade and it's moving in your favor, but 11:26:33it's below 2:1, right? In that case,11:26:36just stick with the original stop-loss,11:26:38right? And by the way, you don't have to 11:26:40do this, right? This is just a sample.11:26:42This is just a framework. This is just 11:26:43me trying to teach you how to think.11:26:45From here, you need to create your own 11:26:48that will fit your own psychology,11:26:50right? But let's say you get into a 11:26:52trade, it's maybe one to one reward to 11:26:54risk. At that point, you just stick with 11:26:56your original stop-loss. Or you could 11:26:58raise your stop loss to break even.11:27:00That's another option for you. You hit 11:27:01one to one reward to risk, raise stop 11:27:03loss to break even. That's an option,11:27:05right? And let's say the trade doesn't 11:27:08work out. It doesn't even go in your 11:27:10favor. You cut you get out at your stop 11:27:12loss. That that part of management is 11:27:14actually really easy. If it's a losing 11:27:16trade, it's incredibly easy to manage 11:27:18because you just stick with your 11:27:19stop-loss. If it's a winning trade,11:27:20that's where it gets difficult because 11:27:22you want to extract as much profit as 11:27:24possible. So, under 2:1 R to R, stick 11:27:27with the original stop-loss, right? You 11:27:28could do that. If you hit 2:1, right?11:27:32Let's say you're risking $100. The trade 11:27:34is now $200 in profit. What you could do 11:27:36is take 50% of profits. You take $100 11:27:39off the table. You move your stop loss 11:27:42to break even, and then you trail the 11:27:44back half of your position. And there's 11:27:46a bunch of strategies that you could use 11:27:48to trail your trades. Trailing just 11:27:50means raising your stop-loss when you're 11:27:52in the position. I would just watch my 11:27:54free Templar course. It'll teach you how 11:27:56to do that. So, this is an option for 11:27:58you. Or at 2:1, you could take 100% of 11:28:02your profits. Or at 2:1, you could stay 11:28:04completely in the trade and just move 11:28:06your stop loss to break even. It's up to 11:28:08you. Whatever you want to do, right?11:28:09This is just a framework. Next, let's 11:28:11say you're up more than 2:1. Let's say 11:28:13you're up 3:1. You made three Rs on the 11:28:16position. You take another 50%, right?11:28:19So, we took $100. So, we took $100 off 11:28:22the table here. We have $100 left in the 11:28:24position. From here, it goes up to three 11:28:27Rs. You take another 50% out. So, now 11:28:30you have a quarter left in the trade.11:28:32And then you trail the rest of it where 11:28:33you raise the stop loss and you let it 11:28:35stop you out for the rest of the 11:28:36position. Or if you make five to seven 11:28:38Rs, you take full profits no matter 11:28:40what. So, if you're in a trade, hits 11:28:42five Rs really fast, let's say you take 11:28:44full profits no matter what, right? This 11:28:46is another really, really great option.11:28:48So, it's up to you what you want to do,11:28:51right? And a couple of other things uh I 11:28:54like to have in my plan is if a trade 11:28:57triggers you in but doesn't give you 11:28:59follow-through, like let's say you get 11:29:00into a trade but it doesn't go right 11:29:03away, it doesn't go in your favor right 11:29:05away and it sort of just chops around at 11:29:07your entry, look to get out quickly,11:29:09right? This is a great uh thing that you 11:29:11can do, right? Like if the trade doesn't 11:29:13immediately work in your favor, look to 11:29:15trail tightly. Look to get out quickly 11:29:17because there's something wrong with it,11:29:18right? If the trade's not, you know, uh 11:29:20playing out to your thesis and to your 11:29:22conviction and it's just chopping around 11:29:24your entry, you could just get out close 11:29:25to break even. If you have really high 11:29:28conviction on a trade, you're going to 11:29:30have looser management, right? You're 11:29:31not going to be trailing as tightly.11:29:33you're going to give the trade room to 11:29:34fluctuate to ultimately continue in your 11:29:37direction to your, you know, uh, prof 11:29:39uh, to your target. If you have low 11:29:41conviction on the trade, let's say 11:29:42there's a trade where it's good enough 11:29:43to take, but you're not that confident,11:29:45you could have tighter management, so 11:29:47you limit your losses or you could take 11:29:48faster profits. This is just a 11:29:50framework, guys, you know, and this is 11:29:51how I would structure it. If you're up 11:29:53one to one, what are you going to do? If 11:29:55you're up 2 to1, what are you going to 11:29:56do? If you're up 3 to1, what are you 11:29:57going to do? When are you raising your 11:29:58stop loss? When are you going to trail 11:29:59to break even? These things should be on 11:30:02your mind, guys. So, trade management,11:30:04very important. Another, are you leaving 11:30:07a runner, which is kind of what we 11:30:08talked about as well, but you have to 11:30:10think about how you're going to manage a 11:30:11trade before you're even in it. Next,11:30:14guys, I have a bunch of super good rules 11:30:17that we could follow. I'm going to kind 11:30:18of hurry up here. We only got around 11:30:19what, two more minutes, not even. So,11:30:22trading rules, your system is only going 11:30:26to be as profitable as how strict your 11:30:28rules are. I don't even know if that 11:30:30makes sense, but you get the idea. Your 11:30:32plan needs to be extremely strict off 11:30:35what you can and can't do in the 11:30:37markets, right? If you're building a 11:30:40building, right, you're going to have 11:30:42it's going to be very strict for where 11:30:44you put the blocks, how you build the 11:30:46foundation, how you build the support 11:30:48for the structure. Same thing with 11:30:49trading. You need to be extremely strict 11:30:51with your rules. So, here are a couple 11:30:52rules that you could use. All right,11:30:55protecting profits, right? Um, one 11:30:58really good thing you could do is 11:30:59protect 70% of your daily profits. If 11:31:02you're up $1,000 on the day, you have to 11:31:04protect 700. This is a really good way 11:31:06of making sure you're retaining the 11:31:09money that you're making, that you're 11:31:10keeping the money that you're that 11:31:12you're working on, right? A lot of 11:31:14people don't do this. They'll make 11:31:16thousands of dollars and then they'll 11:31:17give it all back that day and then lose 11:31:19money. You need to have rules. If you're 11:31:21up a certain amount, you have to keep by 11:31:23the end of the day a certain percentage.11:31:25Another example of this is you're up 11:31:26three hours on the trade, you need to 11:31:28protect two. All right? So, very 11:31:30important. If you're up three hours,11:31:31you're up, let's say you're risking 50 11:31:32bucks and you're up 150 on the trade,11:31:35you have to protect at least $100. You 11:31:39need to have rules to protect profit.11:31:40So, you actually keep what you're 11:31:42making. Okay. Next,11:31:46cannot overk this. This is I mean 11:31:48obvious predefine your max risk. We 11:31:50already talked about that in the 11:31:52determine your risk. You you risk what 11:31:54you're okay with losing and you can't 11:31:56over risk. You have a maximum risk. You 11:31:58stick to it. You're strict with your 11:32:00maximum risk. And you need to predefine 11:32:02your max risk before you take the trade.11:32:05And then you have to size it 11:32:06accordingly. Size the position 11:32:08accordingly. So if it does hit your 11:32:10stop-loss, you lose what your max risk 11:32:14is or you lose less than your max risk.11:32:16Okay? Very, very important. Next, what 11:32:19do we got? Never add to a losing trade,11:32:21guys. Please don't do this. I saw my dad 11:32:24uh do this at some point when I first 11:32:26started trading. He did it. He ended up 11:32:28making money on the trade, but after he 11:32:30was like, "Do not ever do this." If 11:32:33there if you're in a losing trade, it's 11:32:35probably for a reason. Why would you add 11:32:37to a losing trade if it's not working?11:32:39Why would you add to a failing trade?11:32:41Doesn't make any sense. Never do it.11:32:43Never DCA in. I know your thought 11:32:45process. I know you're like, "Oh, yeah.11:32:46Well, if I add to it, it decreases my 11:32:48average price and then if it moves up a 11:32:50little bit, then I'm going to be back to 11:32:52break even or in profit. Don't do it.11:32:55Save yourself the money that you're 11:32:56going to lose. Just don't do it. Trust 11:32:58me, it's a cardinal rule. Next, you have 11:33:01to have rules when to step away. If you 11:33:04feel emotionally or psychologically 11:33:06compromised or if you have more than 11:33:08five losing trades in a row or if you 11:33:10lose your maximum daily risk or if you 11:33:12feel those emotions trickling up within 11:33:14you, step away. Very very important. You 11:33:19have and and this is like personal,11:33:21right? Like you have to think about it 11:33:22yourself like like when you feel certain 11:33:24emotions, you have to step away or go on 11:33:25a walk or or go um talk to your friends 11:33:28or whatever you got to do. But if you're 11:33:30feeling emotional, you h you have to 11:33:31know when to step away from your office.11:33:33All right, guys. Next, no outside 11:33:36beliefs or biases. This should be a 11:33:38very, very important rule. Don't read 11:33:40earnings reports. Don't read the news.11:33:41Don't read financial statements. Don't 11:33:43listen to your friend who thinks he's an 11:33:45expert on investing who only took like 11:33:48one college course. Don't listen to your 11:33:50financial advisor that your dad 11:33:51recommended you maybe for investing, but 11:33:54we are trading. As traders, we 11:33:56exclusively focus on price action.11:33:59That's what we do as traders. We don't 11:34:01focus on outside news, outside beliefs.11:34:04Because most of the time all these 11:34:05beliefs, all these news, all this 11:34:07information are already priced into the 11:34:09stock. Only focus on price action and 11:34:12the relationship between the buyers and 11:34:14the sellers. Now, these are rules that 11:34:17you could have just example, but you 11:34:19need to have rules, right? Very 11:34:22important rules. Another rule that you 11:34:23could have is if you lose [snorts] two 11:34:25or three trades in a row, right? Lower 11:34:27your risk to a certain amount. And then 11:34:30once you have one or two trades in a row 11:34:32uh winning trades and you're feeling 11:34:33confident again, that's when you could 11:34:35scale your risk back to what you're 11:34:36comfortable with. All right, guys. We're 11:34:37we we went way over 20 minutes, but I 11:34:39don't care. This is going to be a banger 11:34:41video. All right, next. Practice pair,11:34:44right? What's pair? Prepare, execute,11:34:48analyze, refined. You're going to be 11:34:50doing this through journaling. All 11:34:51right, it's very, very important, guys.11:34:53The only way you improve as a trader is 11:34:55to improve your system. So, what do you 11:34:57do? You prepare your trading plan.11:34:59Exactly what we just did. You're going 11:35:01to do it for yourself. Once you prepare 11:35:03it, you execute that plan. Take 10 11:35:05trades, 20 trades, 50 trades, what,11:35:07however many is enough for your own 11:35:09style. That establishes a large sample 11:35:12size. From there, analyze what you did 11:35:14wrong. Analyze what you did right.11:35:17Analyze what makes you money. Identify 11:35:20what loses you money. Identify 11:35:21strengths, weaknesses, how you executed 11:35:23your trades. Did you follow your risk?11:35:25Did you follow your plan? Did you follow 11:35:26your rules? what setups are working for 11:35:28you, what setups are not working for 11:35:30you. Once you analyze all of that 11:35:32through journaling all of your trades,11:35:34which is very, very important. You're 11:35:35going to refine your plan. This is when 11:35:37you go back into this giant plan that we 11:35:41just made and you refine it. You could 11:35:43refine the certain qualities that you 11:35:45need to see for a setup, right? Or you 11:35:48um change your risk or you trade your uh 11:35:51change your management, right? Analyze 11:35:53what management ends up making you more 11:35:55money. Does raising your stop loss to 11:35:57break even after one one RTOR make sense 11:36:00for you? Or does taking half profits at 11:36:032:1 make sense? You have to analyze all 11:36:05of this and ask yourself, right? Ask 11:36:09yourself, is this making me money? Is 11:36:12this actually effective for me? And from 11:36:14there, you make the changes. You go back 11:36:16to your plan and you change stuff up.11:36:18And then what do you do as you're 11:36:21changing it? You're re-preparing your 11:36:22plan. Then you execute it again on a 11:36:24large sample size of trade. Then you 11:36:26analyze and you improve. Pair guys, if 11:36:28you build this plan out based off your 11:36:30style, you do all of this right. You 11:36:33have clear rules that you can and can't 11:36:35do in your trading. You have very clear 11:36:37trade management on where you're taking 11:36:39profits, how you're trailing, how you're 11:36:41raising your stop-loss, what to do when 11:36:43you're when it hits target one, two, or 11:36:45three. You actually like if you have all 11:36:47of this, you know what your risk is, you 11:36:48know what setups you're looking or what 11:36:50qualities you're looking for in your 11:36:51setup. you know the setups that make you 11:36:53money. Like if you have all this listed 11:36:56and then you're actually executing it,11:36:58analyzing, refining it through 11:37:00journaling, it's impossible to not 11:37:02improve. You will 1,000% improve over 11:37:05time. All right, guys. This is what I 11:37:07would do. This is what I did when I 11:37:09first started. Um, at this point, guys,11:37:11I don't really have a plan on paper. My 11:37:14plan is ingrained within me. It's 11:37:16ingrained within my bra uh my brain,11:37:18ingrained within my DNA. Now I just know 11:37:21what my plan is. I am my plan. I am the 11:37:25system that I created for myself through 11:37:28five years of experience. That's who I 11:37:30am. My system. The reason I'm able to 11:37:32make money consistently is because I 11:37:34have a system that works for me. And you 11:37:38need to find a a system that works for 11:37:41you. That is the goal here. All right.11:37:44Please actually apply everything that I 11:37:46just taught you in this video.11:37:49Trading psychology is one of the most 11:37:51important components of becoming a 11:37:53profitable trader. And in this chapter,11:37:55that is exactly what we're going to be 11:37:57talking about. I'm going to share with 11:37:59you my 5 and 1/2 years of trading 11:38:01psychology experience, and exactly what 11:38:03I would focus on to improve your 11:38:05mindset, to improve your ability to 11:38:08control your emotions, and of course, to 11:38:10improve your overall trading psychology.11:38:12So, let's hop right into this chapter.11:38:14Now, let's go ahead and get started with 11:38:17the actual class. I have a shot clock 11:38:20right here. We'll do 17 minutes. All 11:38:22right, let's get it going. So, the worst 11:38:26advice that I see all the time on social 11:38:30media about trading is trade like a 11:38:33robot. This is the worst advice that you 11:38:36could hear and it's literally impossible 11:38:39to apply. We, ladies and gentlemen, are 11:38:42not robots. We are human beings and as 11:38:45human beings we have emotions. They are 11:38:49inevitable. Our job as traders shouldn't 11:38:53be to not have emotions. It should be to 11:38:56learn how to control those emotions.11:38:59That is the difference between you 11:39:01making money with trading and you you 11:39:04know being an extremely successful 11:39:06trader. It's the difference between 11:39:07success and failure. Your ability to 11:39:09control your emotions and master your 11:39:12trading psychology. But you need to 11:39:13accept that they're they exist. They're 11:39:16going to happen. And your priority, you 11:39:18know, stop focusing on not having 11:39:20emotions. Focus on learning how to 11:39:22control them. And ultimately, there are 11:39:25two emotions that that are rooted in 11:39:29every single trading issue that exists 11:39:33within your trading psychology. It all 11:39:35comes down to two different emotions.11:39:38And we're going to talk about the first 11:39:39one, which is greed, right? And and by 11:39:43the way, this is every issue. Every 11:39:45issue Whoops, almost dropped the mic.11:39:48Every issue that is within your trading 11:39:51ultimately comes down to greed. And 11:39:53there's one more that we're going to 11:39:54talk about in just a second. But what is 11:39:56greed? Greed is your desire to make 11:39:59money. And ultimately, your strong 11:40:03desire to make money is what's stopping 11:40:06you from making money. And we're going 11:40:08to go over the exact ways that's 11:40:09actually happening. The first way is 11:40:11overtrading. This is when you are taking 11:40:15way too many trades. But to be more 11:40:17specific, this is when you're taking low 11:40:20quality setups. You're forcing trades 11:40:24and you're trying to force profits,11:40:26right? You're forcing setups that aren't 11:40:29there, that don't actually fit the 11:40:32criteria in your trading plan. Why are 11:40:35you overtrading? Ultimately, you want to 11:40:37make more money. Why do you want to make 11:40:39m more money? Because of greed. This 11:40:43ties into greed. You need to really 11:40:45accept that. So, how do we fix 11:40:47overtrading? Like, if you're overtrading 11:40:48right now, how do you fix it? Well, you 11:40:51need to have a very detailed plan of 11:40:55what goes into a highquality setup and 11:40:57what goes into a lowquality setup. If 11:40:59you don't have a plan like that, you're 11:41:01you're you're never going to become 11:41:02successful. When you're looking at the 11:41:04charts and you identify a setup, there 11:41:07should be like alarm bells in your brain 11:41:09that are like, "Yep, that's a high 11:41:10quality setup." Or, "Nope, that's not a 11:41:12high quality setup." There's specific 11:41:14qualities, criteria that go into it 11:41:17being high quality setup. This needs to 11:41:19be written down so when you're looking 11:41:20at a trade, you can identify, is it a 11:41:22good setup or a bad setup. If it's a bad 11:41:25setup, don't take it. You don't trade 11:41:28that setup, right? If you do trade it,11:41:30that's overtrading, right? you only 11:41:32focus on A minus to A+ setups, maybe 11:41:36occasionally a B+ setup if you're 11:41:38feeling aggressive. Now, if you don't 11:41:39know the criteria or the qualities that 11:41:41go into A+ setups, I highly recommend 11:41:44watching my free 10 plus hour course.11:41:47You could find that in the description 11:41:49of this video. It'll be linked. You 11:41:50could start it. It's 100% free. It's 10 11:41:53hours long. It is genuinely better than 11:41:55most paid courses on the internet. It'll 11:41:57teach you all of this stuff. The next 11:42:00way that greed could be affecting your 11:42:02trading is overleveraging or 11:42:03overrisisking. Right? You could, you 11:42:06know, trade profitably and make a bunch 11:42:09of money for 3 months, 6 months, a year,11:42:12and then one trade you can give it all 11:42:15back. One trade can ruin your account by 11:42:19overleveraging or overtrading. Now, why 11:42:22does this happen? It happens because you 11:42:25have a desire to catch a big trade and 11:42:27to make a ton of money ultimately 11:42:30because of greed. The way to stop 11:42:32overrisisking and overleveraging 11:42:35is honestly be disciplined with your 11:42:36plan, right? When you like in your 11:42:39trading plan, you should have a specific 11:42:41risk that you cannot go over. Like for 11:42:44me, I can't lose more than $5 to $600 on 11:42:47a trade. That's I just can't do it. It's 11:42:49not in my plan. Like if I I don't ever 11:42:52do that. I'm very very strict with it.11:42:54Right? The way to stop overleveraging 11:42:56and over risking is to be strict with 11:42:58your plan and to have a concrete risk 11:43:01that you cannot go over in a specific 11:43:03trade or in a specific day. Have a rule 11:43:05where you can't lose x amount in a 11:43:08specific day. Like for me, if I lose 11:43:09more than like a,000 or 1500 in a single 11:43:11day, I'm done with the day. I'm done 11:43:14trading. You need to have that rule for 11:43:16yourself. You need to have rules that 11:43:17limit the amount that you lose in a day 11:43:20or in a trade. Okay, the next way that 11:43:23over le or that greed can kind of 11:43:25materialize in your trading is through 11:43:27revenge trading where you take a setup 11:43:29uh on a stock or whatever you're 11:43:31trading. You lose on it and now you have 11:43:33feelings, you have you know those 11:43:36emotions to essentially make your money 11:43:39back or you know make your money back 11:43:42and then also make profit. This actually 11:43:44plays into the next emotion we're going 11:43:46to talk about. We'll we'll talk about 11:43:47that in just a second. But what is 11:43:49revenge trading? You're you're trading 11:43:51because why? Not because there's a 11:43:54quality setup, not because there's 11:43:56specific criteria that you like to see.11:43:58You're trading because you lost on that 11:44:00setup and now you're trading it again to 11:44:02make your money back. That's not a 11:44:04reason to take a trade. Just because you 11:44:07lost on a setup doesn't that's not a 11:44:09good enough reason to take that setup 11:44:11again. You need a you need quality 11:44:12criteria to take a trade, right? So,11:44:16you're you're again you're forcing 11:44:18profits. you're forcing yourself to, you 11:44:20know, either break even on that trade or 11:44:22to make money back. Ultimately, this 11:44:24materializes in greed. How do you fix 11:44:26revenge trading? What I like to do is,11:44:29um, if I lose more than two to three 11:44:31times on one stock, if I'm scalping it,11:44:34I remove it off my watch list. It's a 11:44:36really great way of doing that. If 11:44:38you're only trading one to two 11:44:39securities, maybe you only trade NQ or 11:44:42ES or something. In that case, you can,11:44:45you know, after two or three losing 11:44:47trades, you're done for the day and you 11:44:49limit yourself, right? You just got to 11:44:51be disciplined with it, right? So, have 11:44:52rules in place for overrisking for the 11:44:55maximum amount that you could lose in a 11:44:56day or on a trade and have rules for 11:44:59revenge trading where you stop trading 11:45:01after one or two or three losing trades.11:45:03Okay. Next, another way greed can 11:45:06materialize in your trading is 11:45:08impatience. And this is not even like 11:45:10like from a trade to trade basis like 11:45:13not I'm not saying like being patient 11:45:15within a trade. I'm talking about the 11:45:17impatience of trying to make money and 11:45:20become a profitable trader trader as 11:45:22soon as possible. Okay. A lot of times 11:45:26most people who get into trading, I 11:45:27talked about this in my last video,11:45:29you're not actually interested in 11:45:31becoming skilled traders. You're not 11:45:34actually interested in learning, you 11:45:36know, what goes into a high quality 11:45:37setup or how to manage risk or how to 11:45:40manage your positions correctly. You're 11:45:42just focused on making money. You're not 11:45:45actually interested in becoming a trader 11:45:47and you're impatient. You're so, you 11:45:50know, eager to make money that you skip 11:45:52the process where you try to like cut 11:45:55corners. you skip certain steps and you 11:45:58just have to for this, you know, you 11:46:00have to change your expectations when 11:46:02you're going into trading. Stop thinking 11:46:04about the money. The more you think 11:46:06about the money, the more it runs away.11:46:08The more you think about becoming a 11:46:10skilled and profitable trader and 11:46:12focusing on the process, the m the more 11:46:14money comes to you, right? I've never 11:46:16met a really really good trader that 11:46:18doesn't make money, but I've met a ton 11:46:20of people who want to make money with 11:46:22trading who don't. Right? focus on 11:46:24becoming really really good and the 11:46:26money will come to you and that could 11:46:27take time. You need patience, right?11:46:29Trading like think about it. You go to 11:46:30school for four years to get a degree 11:46:34that doesn't even guarantee you a job,11:46:36but you're not willing to spend 3 to 12 11:46:38months to become profitable. Doesn't 11:46:40make any sense. You have to shift your 11:46:43expectations and be patient with it.11:46:45Focus on act on learning the actual 11:46:47skill set. Don't focus on the outcome.11:46:49Next, holding too long. This is when 11:46:53you're in a profitable trade. The trade 11:46:55is making you money. You're up, let's 11:46:57say, two Rs, three Rs. You're feeling 11:46:59super good. And then you decide to hold 11:47:01too long because you want to make more 11:47:03money. And this is when you ignore your 11:47:06exit plan because you want to hit that 11:47:07home run trade. You're not happy with 11:47:09two Rs. You want to make four Rs. You're 11:47:11not happy with $1,000 profit. You want 11:47:13to make $10,000 profit. Your desire to 11:47:16make more money on that trade is 11:47:18stopping you from making any money at 11:47:19all. Like if you're up, let's say a,000 11:47:21bucks on a trade, you could take take 11:47:24partials, take half, take 500 bucks off 11:47:26the table, take 750 off the table.11:47:28You're still in the trade, but you took 11:47:30some profits already versus you're up 11:47:32a,000, you want to make 3K, and then all 11:47:35of a sudden you you don't you um ignore 11:47:38your exit plan and next thing you know,11:47:39it becomes a losing position. That's 11:47:42ridiculous. That ultimately comes down 11:47:43to greed and you just wanting to make 11:47:46more money versus focusing on actually 11:47:48trading the right way and following your 11:47:50exit plan. If you don't have an exit 11:47:51plan, I would watch my free Templar 11:47:54course. I go over how to create an exit 11:47:56plan. It's extremely useful. Everyone 11:47:58should have a plan on entering into a 11:48:00trade and a plan on exiting that trade.11:48:03Okay? You can't have one without the 11:48:05other. Next, guys, so though this is all 11:48:08about greed, right? If one of these is 11:48:10your issues, like that's because of 11:48:12greed. And hopefully some of my 11:48:14solutions helped you out there. Now, the 11:48:16next emotion is fear. There's greed.11:48:21Your desire to make a lot of money. And 11:48:23then there's fear. Fear is being fearful 11:48:26that you're going to lose money or 11:48:27fearful that you're not going to make 11:48:29money. Okay. The first way fear 11:48:32materializes is the fear of being wrong.11:48:35And I have just around seven minutes.11:48:37Okay. The fear of being wrong. A lot of 11:48:40times I see beginner traders, they're 11:48:43more interested in being right versus 11:48:46wrong versus making money because they 11:48:49have their ego plays into it. They can't 11:48:53handle their ego being wrong where they 11:48:56enter into a trade, they're so confident 11:48:58it's going to go higher. They're so 11:49:00confident that's going to happen that 11:49:02when it moves lower or when it doesn't 11:49:04play out the way that they think it's 11:49:05going to, it hurts their ego. It hurts 11:49:08to be wrong. And you can't do that,11:49:11right? You you can't be focused on being 11:49:14right or wrong. That's not what trading 11:49:15is about. Trading is about making money.11:49:18Okay? So, if you feel like your ego 11:49:21plays a heavy role in your trading, you 11:49:23need to find solutions to that. You have 11:49:25to realize that, you know, you should 11:49:27have a much stronger desire to make 11:49:30money than to be right. And sometimes 11:49:32the best way to make money is to limit 11:49:34your losses. All right? So, if you have 11:49:37the fear of being wrong, you have to 11:49:38shift your perspective and focus more on 11:49:41making money versus just being right.11:49:44Okay. Next, fear of losing. This is when 11:49:48you are risking money on a setup and you 11:49:52hesitate where let's say you see a 11:49:54really high quality trade and you 11:49:56hesitate on that trade or you second 11:49:58guess yourself and that trade actually 11:50:00works in your favor and then you're 11:50:02thinking to yourself, why didn't I take 11:50:04that trade? I I knew it was going to go 11:50:06down or I knew it was going to go up but 11:50:08I didn't take it. Why am I so stupid?11:50:10Right? It's happened to me. This 11:50:13ultimately boils down to your fear of 11:50:14losing. you're fearful that you're the 11:50:18money that you risk, right, you're going 11:50:20to lose it. That you're you're fearful 11:50:22that you're going to lose money. The way 11:50:24that you fix this is to number one,11:50:26lower your risk. You're risking way too 11:50:28much money if you have a fear of losing 11:50:30money. You have to pick when you decide 11:50:33how much you're going to risk on a 11:50:34trade, you have to pick an amount that 11:50:37is not going to kill you if you lose 11:50:40that amount, but it's also not going to 11:50:42be so low where you're like, "Ah, I 11:50:44don't care." Like if I risk $10 on a 11:50:45trade, I don't care, right? Okay, I'll 11:50:47lose it. I don't care. But if I risk 11:50:49$500 on a trade on one hand, I'm not 11:50:51going to feel affected that affected if 11:50:53I lose it. But if I do lose that amount,11:50:55I'm still going to kind of feel it,11:50:57right? You have to find that sweet spot.11:50:59But if you're like actually fearful when 11:51:01you're entering into a trade, it's 11:51:02because you're risking way too much,11:51:04right? lower your risk to the point 11:51:06where you're comfortable with losing 11:51:08that amount and then you're not going to 11:51:11have that fear of entering into trades 11:51:12because worst case you have your 11:51:14stop-loss. You know exactly how much 11:51:16you're going to lose. So, it's okay. You 11:51:18know the worst possible outcome when you 11:51:21enter into a trade. You're going to lose 11:51:23what your predetermined risk is. And you 11:51:25need a predetermined risk. You need that 11:51:26in your trading plan. FOMO. You fear 11:51:29you're missing out on the trade of the 11:51:31century. So, you break your plan and you 11:51:32overtrade. A lot of people go through 11:51:34this, the fear of missing out. This is 11:51:36when, you know, you see a trade, you 11:51:38feel like you're missing out on it.11:51:40Maybe you were late to it. Maybe you 11:51:41didn't spot it in time. Maybe you passed 11:51:43on the position. You just like let it,11:51:45you know, you didn't decide to take it.11:51:47Then it starts to move in your direction 11:51:48and you FOMO into it because you fear 11:51:50like you're going to miss out on some 11:51:52amazing opportunity. Understand there 11:51:54are hundreds, there's going to be 11:51:56thousands, tens of thousands 11:51:58opportunities in your lifetime, in your 11:52:00trading career. You're you're going to 11:52:02have trades that same day, you're going 11:52:03to have a trade the next day, you're 11:52:04going to have a trade the next week.11:52:06Don't get so caught up on one trade that 11:52:08you end up getting into it late because 11:52:10of your emotions and then you end up 11:52:12losing money. There's plenty of 11:52:14opportunities to make money in trading,11:52:16guys. This past week, there was a trade 11:52:18that if I literally I kind of misplayed 11:52:20it. If I played it right, it would have 11:52:22made me like 20 to 30K. I swear. And 11:52:25instead of FOMOing in late, I was like,11:52:28you know what? It is what it is. I'm 11:52:30going to let it go. It was a tough pill 11:52:31to swallow, but I had to do it. Right.11:52:33So, just understand there's there's 11:52:35going to be plenty of opportunities.11:52:36Don't get so caught up on one trade.11:52:38There's th there's going to be thousands 11:52:39of setups in the markets. All right.11:52:42[snorts] Next, fear of not being good 11:52:44enough, lack of confidence, switching 11:52:47strategies. So, ultimately, lack of 11:52:50confidence and uh switching strategies.11:52:53This is go going to boil down to the 11:52:56fact that you're not confident in your 11:52:57trading. you're not confident in your 11:52:59ability to make money, maybe because 11:53:01you're a beginner, or maybe because 11:53:02you're not profitable. Honestly, the 11:53:04best way to actually fix this is to have 11:53:06a coach or a mentor in your trading. And 11:53:10it doesn't have to be me, it could be 11:53:11anyone, but someone that could show you 11:53:13how to trade the right way and someone 11:53:15that you could trade with every single 11:53:17day. Um, if any of you guys are looking 11:53:19for, you know, a full-time coach or a 11:53:22mentor, I do have a mentorship program.11:53:23I will be completely transparent where I 11:53:25take traders under under my wing and I 11:53:27scale them from zero to 10 to $50,000 a 11:53:31month with trading. I trade live every 11:53:33single day. I take you under my wing. I 11:53:34teach you from A to Z. And ultimately,11:53:36we're trading together every single day.11:53:39You're learning how to trade by doing it 11:53:41with me. I share my screen. We're on the 11:53:43same uh call. We're trading together.11:53:45We're making money together. And most of 11:53:46my students, they never have lack of 11:53:48confidence. They never switch strategies 11:53:50because they learn how to trade 11:53:51correctly from the very, very beginning.11:53:54All right, guys. We have just about 1 11:53:55minute and 30 seconds left. So, if you 11:53:57do want a full-time mentor, you're 11:54:00serious about becoming a full-time 11:54:02trader, you want to do this, you know,11:54:03as fast as possible, you you don't want 11:54:05to figure it out by yourself, uh you can 11:54:07apply um in the link in the description 11:54:10and we'll we could see if this is a good 11:54:12fit uh for me to work with you and for 11:54:14you to trade live with me every single 11:54:16day, guys. Next, in terms of fixing a 11:54:18lot of these trading psychological 11:54:19issues, we kind of talked about it, but 11:54:20real quick, uh, something that's really 11:54:23helped me is start the trading day in 11:54:25the green. Even if it's a small winner,11:54:27when you when at 9:30 hits, the opening 11:54:30bell hits, make sure your first trade is 11:54:33a winner. Even if it's a small winner,11:54:35even if you have to lower your risk,11:54:37make sure it's a winner. Me doing this 11:54:39like was a gamecher for me. When I start 11:54:42off the day positive, I just have such a 11:54:44different psychology moving into the 11:54:46rest of the day. Just do it and you'll 11:54:47see the results. Create a trading plan.11:54:49I'm not going to go over it in this 11:54:51video. Just subscribe to this channel.11:54:53This is the next video that I'm making.11:54:55When in doubt, always lower your risk.11:54:57This is so freaking important. Whenever 11:54:59you're emotional, you're feeling doubt,11:55:01you're feeling lack of confidence,11:55:02you're feeling anything that's not a 11:55:04positive feeling in your trading, lower 11:55:06your risk. Always lower your risk in 11:55:09times of doubt so you could protect your 11:55:11downside. Another thing you should be 11:55:13doing is focusing on becoming a break 11:55:15even trader before becoming a profitable 11:55:17trader. Most people try to go from uh 11:55:19losing or beginner to profitable.11:55:22Instead, you should be going from 11:55:23beginner to break even trader, break 11:55:25even trader to profitable trader. That 11:55:28step in the middle is extremely 11:55:29important. Oh, there's a timer. But real 11:55:31fast, we'll finish these. Step away when 11:55:33you feel your emotions get to you. Just 11:55:35step away from your desk if you feel 11:55:36like you're getting emotional. Have 11:55:38rules. And ultimately guys, every single 11:55:41one of these issues in your trading, the 11:55:43greed, the fear, overtrading,11:55:44overleveraging, revenge trading,11:55:46impatience, everything. Fear of losing,11:55:48it all boils down to your discipline.11:55:50Being disciplined and making sure you do 11:55:52the actionable steps within your trading 11:55:54plan to prevent all of this from 11:55:57happening. Whether that's you stepping 11:55:58away from your trading desk, whether 11:55:59that's you lowering your risk, whether 11:56:02that's you having rules on how much you 11:56:04could lose on a day or on a trade,11:56:06whether that's just specific rules just 11:56:09to you for how to not overtrade or to 11:56:12how to, you know, uh or what to do when 11:56:14you feel FOMO, whatever the case is, you 11:56:16need to be disciplined with your rules.11:56:18That's what's going to help you with all 11:56:20this trading psychology. All right,11:56:21guys, that's the end of the video. Make 11:56:23sure you subscribe to the channel. Um,11:56:25make sure you leave a comment if you 11:56:26found this valuable. Leave a like. It 11:56:28helps the YouTube algorithm. And 11:56:29hopefully you found a tremendous amount 11:56:31of value in this video.

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